Inside story of how A-Rod’s Timberwolves bid fell apart

Manager Marc Rohr, who several years ago said owning the Minnesota Timberwolves was a dream come true, largely abandoned the option of buying out control of the team and handed control of the team to Alex Rodriguez. said a person familiar with the matter.

If the deal goes through, Rohr would become the team’s owner, with his friend and co-investor Rodriguez playing a secondary role, the people said.

But Roar, who told the NBA he was worth about $4 billion, said he and A-Rod would need to raise the $520 million they needed to increase their stake in the team from 40 percent to 80 percent with co-investors. didn’t want to invest a lot of money.Wednesday deadline

Timberwolves owner Glen Taylor terminated the sale on Thursday, eliminating any chance that Rohr and A-Rod would acquire a majority stake in the team.

Mr. Lore was willing to invest a relatively small amount of money, but this new round of funding will allow him to significantly increase the amount of his investment. Officials said they were hoping to catch up to a similar level. said a person with direct knowledge of the situation.

The original plan was for Lore and A-Rod to invest roughly evenly in the team. That meant A-Rod needed to raise the bulk of the money for his next investment round, and he spent months trying to do so.

Mr. A-Rod may have been helped by not using an investment banker in recent months, people familiar with the matter said.

He and Rohr agreed to buy the Timberwolves in 2021 through a three-step process at a valuation of $1.5 billion. They bought 40 percent of the team in two stages. Mr. A-Rod, who is considered to be worth much less than Mr. Rohr, had to come up with most of the money for his next payment on his own, according to a person with direct knowledge of the situation.

Mr. A-Rod was looking to sell his interest in the new funding round at a valuation of more than $2 billion, rather than at a valuation of $1.5 billion, according to people familiar with the situation. Based on other NBA sales, the team’s value rose to about $3 billion in three years.

A-Rod would have pocketed the difference between the $1.5 billion purchase price and the valuation at which the shares were sold, according to people familiar with the matter.

Perhaps if I had lowered my expectations I might have had an easier time.

There weren’t many parties that wanted it to play second fiddle to the Loa and A-Rod ownership groups.

“Alex has overcome everyone,” said a source who recently spoke with A-Rod and was considering investing in the team.

The ace in the hole for A-Rod was private equity firm Carlyle Group. However, the NBA took months to approve Carlisle, and finally did so in the last few days.

Still, without Carlyle, A-Rod came up with a backup plan and raised funds, but the whole process was delayed.

A-Rod and Roa insist they met the deadline, but Taylor disagrees and the matter will now be left to the arbitrator’s discretion.

What’s clear is that even if Lore and A-Rod had money awaiting NBA approval, it wasn’t expected until the April board meeting, sources said.

The deadline to complete the deal was March 27, but the question is whether the NBA extended the deadline or whether there was legal standing to do so.

A-Rod may have been surprised by Taylor’s announcement that his deadline would not be extended, said a person who has done business with the owner. “A-Rod must have read the press release this morning and found out. That’s Glenn’s style.”

In fact, Taylor met with Roa and A-Rod a few days ago and hinted that everything was fine, the source said.

In 2020, former Timberwolves general manager Kevin McHale sued Taylor, who had a history of feuding with a former partner, for allegedly interfering with his medical company.

Sources say Taylor loves running the team and has made that clear in recent months to Rohr and A-Rod, who he thought were too involved.

A source told the Post that Taylor had been “cooling off” about a sale in recent months as the Timberwolves rocketed into NBA championship contention and Anthony Edwards blossomed into a superstar.

This claim was ostensibly confirmed in Taylor’s statement To John Kroczynski of The Athleticit said. [we] I created this team. The players are already here. And it seems to me that we should be able to continue to operate very positively for many years, and I would like to be a part of that. ”

Taylor and the Timberwolves organization issued a scathing statement of their own after Rodriguez and Lorre’s initial statement said they missed the March 27 financial deadline and the team was “no longer for sale.” He accused Taylor of “seller’s remorse.” ”

“We have met our obligations, have secured all necessary financing, and remain fully committed to completing the acquisition of the team once the NBA completes its approval process,” Rodriguez and Lorre said in a statement.

“Glenn Taylor’s statement is an unfortunate case of remorse on the part of the seller, shortsighted and causing confusion for the team and fans during a season of historic wins.”

It seems likely that a mediator will decide what will happen next.

The Timberwolves entered Thursday as the Western Conference’s top seed, a half-game behind the defending champion Nuggets, with a record of 50 wins and 22 losses.

Termination would be a huge financial blow to Taylor.

Sources say Taylor should have little trouble finding someone else to buy out his 40% stake in the team, with Rohr and A-Rod likely paying if he decides to sell it later. The company is expected to be purchased at a valuation of $3 billion, double the amount agreed upon.

Now, Lore is fully focused on keeping his gourmet food delivery company Wonder afloat. He has invested hundreds of millions of dollars in money-losing startups in recent months, We just completed a $700 million funding round.said the official.

The New York Times ran a feature this month about the lore and its plans. Make Wonder a company with a market capitalization of $30 billion.

As The Post exclusively reported, Wonder offered a deep discount to investors who bought convertible stock in the round, which values ​​the company at $3.5 billion. This was the same valuation that Wonder received when it was acquired. The last time we raised funds was in June 2022..

Mr. Lore owns more than half of the company, which accounts for most of his net worth.

Under the terms of the new offer, investors who buy the securities now will have the option to convert them into equity at a 50% discount to the company’s valuation during the next round of funding, which will be a down round.

Lore is best known for founding Diapers.com and selling his grocery startup Jet.com to Walmart for $3.3 billion in 2016. he told FOX Business last month. He now spends 100 hours a week on Wonder.

Although he still attended many Timberwolves games, fundraising was largely left to A-Rod.

If Roar sells the stake in the team he has already purchased (estimated at 27 percent), he could double his money and use it to help the Wonder or replenish his coffers.

Roar and A-Rod also came close in 2020, but failed to acquire the Mets.

They lost out to hedge fund billionaire Steve Cohen, who bought the team for $2.4 billion.

In an unusual move at the auction, the Mets’ banker asked A-Rod to sneak a peek at his final offer. A-Rod contributed to the Mets. Mr. Cohen later reached an agreement for slightly more than that amount, leading Mr. A-Rod to believe the process was rigged, the Post reported at the time.

For now, this looks like another tough loss.