Fosun’s £450m takeover prize at risk at Wolves as Mike Ashley warning sounded

Wolves fans are very much of the opinion that Fosun have overstayed their welcome in the Midlands, and it’s hard to disagree.

Fosun bought 100% of Steve Morgan’s shares in Wolves back in 2016 for around £45 million.

It wasn’t all bad to start off with. Wolves were seen as nothing but a stable Championship team when Jeff Shi and co took charge, but they were soon to be transformed.

Nuno Espirito Santo was acquired, and investment was provided to really lay the foundations for a promotion charge. A Championship record deal for Ruben Neves, as well as signings like Pedro Neto and Diogo Jota followed, which left rival supporters scratching their heads.

It really felt like the start of something special, and it genuinely did lead to years of growth and success, with the Portuguese boss leading Wolves all the way to the quarter-finals of the Europa League in 2020.

However, times have changed a lot since then, with the decline coming way quicker than any supporter would have imagined under the Chinese owners.

Mike Ashley’s £20 million Sheffield Wednesday bid shows how far Wolves could yet fall under Fosun

Mike Ashley was well-known for his 14-year stint at fellow Premier League side Newcastle United.

However, four years on from his sale to the Saudi PIF-led consortium, he’s now looking to get back into the ownership game after launching a £20 million bid for Sheffield Wednesday (The Telegraph).

Sheffield Wednesday have had some ownership issues of their own, being run into administration by Dejphon Chansiri, which led to them being docked 12 points.

And whilst this has nothing to do with Wolves, it’s a real warning to Fosun about what could potentially be coming their way if they don’t sell up.

Fosun need to wake up and come to a realisation on relegation and what the future holds

Speaking to Finance expert Adam Williams, he took a look into what relegation would mean for Wolves and the comparison to what is going on at Sheffield Wednesday.

As an asset, Wolves are probably worth ten times the £45m Fosun paid in 2016. Even adjusting for inflation, that’s a pretty monumental return that they would have struggled to get in many other industries.

Yes, they’ve invested quite heavily to get them where they are, but the inclination to use their own funds appears to have fizzled. You can trace that back to directives from the Chinese government about foreign investment in sport. It’s just not as attractive as it once was for them.

The damage has already been done😡

In the Championship, that value starts to decline, especially if you spend two seasons there and you exhaust 90 per cent or your parachute payments. I think in years one and two, they’d probably be looking at maybe £200-250m. After that period, it’s going to start depreciating pretty rapidly.

The Sheffield Wednesday case is interesting because, for £20m, you’re taking on some debts, a stadium that is in desperate need of a refurb, and a suboptimal playing squad. You’re basically paying for a badge. With Wolves, they have more genuinely valuable assets, so their value isn’t going to drop off to the same extent, but there’s no doubt that relegation would have a very negative impact on their value.