AC Milan's Chinese owner takes financial battle down to wire

By Elvira Pollina and Paola Arosio

MILAN (Reuters) - The indebted Chinese owner of Italian soccer club AC Milan has valued the club at around 700 million euros ($818 million) and has decided against a quick sale for a much lower valuation to U.S. television tycoon Rocco Commisso, a source said.

Commisso is among prospective bidders circling AC Milan, aware its owner, Li Yonghong, is in a tight corner. Li risks losing control of the club to his creditor, U.S investment fund Elliott, unless he pays 32 million euros to Elliott by July 6.

Commisso's bid values AC Milan at about 500 million euros including debt, several sources have said. Li has decided the club's value, including debt, should be 200 million euros higher, a source close to the Chinese businessman said.

"This isn't a deal that you close in three weeks," the source said, referring to Commisso's offer.

With the offer on ice for now, Li must repay the 32 million to Elliott or else the fund manager, which helped finance his acquisition of the club, can take full ownership of the club.

The source said without elaborating that the 32 million euros debt and the deadline for repayment were "under control".

Commisso, owner of North American soccer team New York Cosmos, has offered to buy 70 percent of the club from Li, sources say. The Ricketts family, owner of Major League baseball team Chicago Cubs, has also expressed interest in AC Milan.

Commisso said in a statement on Friday that Li was unwilling to conclude a deal on acceptable terms in a timely manner. The statement gave no financial details on his offer.

"Given the passion of Commisso for the game of football and of the ties with his native Italy, this situation is extremely unpleasant for him," the statement said.

Complicating the situation for Li, European soccer's governing body banned AC Milan from next season's Europa League competition due to its uncertain finances. Participation in the League is a major revenue-raising opportunity.

AC Milan has decided to appeal against the UEFA ban to the Court of Arbitration for Sport in Lausanne, Switzerland. The court has yet to set a date for hearing the appeal.

AC Milan and Li have a total accumulated debt of 308 million euros towards Elliott, which lent 180 million euros to Li and 128 million euros to AC Milan to fund the acquisition of players and repay the club's debt with banks.

Commisso has offered to take on all of the debt and would invest a further 150 million euros for the acquisition of new players and to run the club, sources have said. He would also reimburse the 32 million euros owed by Li to Elliott.

His offer would leave a share of 30 percent worth some 150 million euros in the hands of Li, who would have by then accumulated a theoretical loss of 300 million euros, according to Reuters calculations based on the sources' figures.

($1 = 0.8559 euros)

(Editing by Mark Bendeich and Alison Williams)