Botafogo moves closer to GDA Luma takeover after Eagle dilution

Botafogo’s member association is poised to consolidate control of the club’s football company after Eagle Bidco allowed a deadline to purchase newly issued shares to expire, opening the way for a proposed sale to investment firm GDA Luma.The association, known as Botafogo Social, can now subscribe for the remaining shares from a capital increase approved on September 24, potentially raising its holding in the Sociedade Anônima do Futebol (SAF) to 99.18%.Explaining the capital increase, Botafogo said in a statement: “The measure aims to help restore the company’s cash flow, considering its current economic and financial situation and the context of judicial restructuring, including the fulfilment of current obligations.”Eagle’s decision not to exercise its subscription rights would leave the company with a diluted stake of 0.82% if the association takes up the outstanding allocation.Botafogo Social has five calendar days to subscribe for those shares, with the next anticipated step being the sale of a 90% holding to GDA Luma, led by Mexican businessman Gabriel de Alba.The capital increase authorised the issue of 200 million new shares at R$0.01 each, raising R$2m for the SAF. The association subscribed for 102 million shares, representing its existing 51% interest, and can now acquire the 98 million shares allocated to Eagle.De Alba has already been participating in management decisions and providing financial support to help meet the club’s obligations while the proposed ownership transaction remains unfinished.The latest development follows a contested shareholder meeting at which Eagle was represented but did not vote because its political rights in the SAF had been suspended by a Rio de Janeiro court.John Textor attempted to prevent the meeting, maintaining that he remained the legitimate owner of 90% of Botafogo’s SAF and arguing that the ownership structure should remain unchanged while disputes over control continued in Brazil and overseas.Before the meeting, Textor offered a R$100m capital injection in exchange for suspending the vote and warned that he could pursue legal action to challenge its decisions and seek to hold administrators and the controlling shareholder responsible.His application for an injunction was rejected by judge Victor Agustin Jaccoud Diz Torres, who allowed the meeting to proceed and imposed a penalty for bad-faith litigation.The proposed subscription would substantially reduce Eagle’s economic interest through the issue of additional shares, rather than through a direct purchase of its existing holding.Completion of that process would strengthen the association’s position to negotiate the transfer of control to GDA Luma, although neither the remaining share subscription nor the subsequent sale has yet been completed.