Rumour: Eugene Melnyk Receives Offer to Purchase the Ottawa Senators

The Sens successfully completed a refinancing of $135M debt yesterday

Things are getting interesting in Ottawa, and nobody knows if it’s good news or just another indication of the incredibly poor financial state of the Ottawa Senators. The team released an official statement yesterday that the club has completed a re-financing of $135M. Basically, this means that Melnyk took out a loan to re-pay older debt and have a but extra cash to spend. Being a private company, it’s virtually impossible to get the rates on this loan or now the exact amount going to repay the older debt. My guess would be that the majority of that amount is going to debt repayment. The interesting piece of that announcement is also the “syndicate of financial institutions” fact which could mean many things but more importantly this wasn’t an easy debt for Melnyk to take out and could possibly have involved institutions that have a vested interest in cleaning the financial state of this organization. Without more information, nobody can make a full assessment of what this debt means but it’s safe to assume, Melnyk is in as much financial trouble with the Sens as we thought and putting himself in more debt (probably at a higher risk interest rate) is just a desperate attempt to keep things afloat. Why he thought this news is worthy of breaking to the public via an official statement makes no sense, this isn’t good news for Melnyk and not something he should be bragging about. I have a feeling there’s more to come out of this, we shall wait and see.

Things got a lot more interesting this morning however when David Pagnotta of The Fourth Period tweeted the following:

The article gives more details on the potential offer and a statement from Bill Daly acknowledging that both the refinancing and offer have been discussed at the board of governor's meeting. This Daly quote confirms that when it comes to the sale of the Ottawa Senators, there seems to be a lot of smoke and you all know what they say about smoke.

NHL Deputy Commissioner Bill Daly acknowledged this report when contacted via email early Thursday morning, and wanted to temper the subject by stating that he doesn’t “equate an offer to purchase the Sens (and reporting that offer to the board) with an intention or desire to sell the team. The two are very different in my mind.”

Pagnotta reports that the asking price was in the $650-700m range, and that the initial offer was much lower.

In comments to other reporters since the article was released Daly has continued to poured cold water on the idea that Melnyk wants to sell the team (or is actively trying to do so), but has not refuted the claims that an offer was discussed at the Board of Governors meeting. Daly did say “Offers are made for NHL teams all the time. Doesn’t really mean anything,” but it seems at least a little unlikely that meaningless offers with no chance of being accepted would be discussed by the BOG.

I will stress that as of now, this is only a rumour (one of many that have come up lately) and no Sens fan should get overly excited or optimistic about a potential sale in the near future.

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