Einhorn Reworks Mets Deal

Aug 9 2011 | 12:44pm ET

Greenlight Capital founder David Einhorn may finally be rounding home in his negotiations to buy a minority stake in the New York Mets.

A deal may be finalized by the end of the month, the New York Post reports. The two sides have been in talks since May, but ran into trouble when the proposed terms of the loan ran afoul of the Mets’ lenders.

A syndicate led by JPMorgan Chase—owed about $500 million by the Mets—objected to terms that would have seen Einhorn repaid before the banks. While the original $200 million deal would have been structured entirely as a loan, the new agreement calls for only half that money to come in the form of a loan and puts Einhorn behind the banks in the line for repayment by the Mets current owners, Fred Wilpon and Saul Katz.

In addition, Einhorn will now only buy a 17% stake in the Mets, rather than a 33% stake. The Wilpons have five years to repay him; if they do not, he’ll have the right to take a majority stake in the team for a nominal sum. Either way, he gets to keep his 17% of the Mets.

The new deal could also create some competition for Einhorn as a possible future majority owner of the team, however: If the JPMorgan syndicate, which will get about $70 million of Einhorn’s money, demands further refinancing in a few years, the Wilpons could bring in another equity investor.

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