An agreement between minority owner Gary Chouest and long-time New Orleans Hornets' majority owner George Shinn has been reached, league sources said Monday morning, and an annoucement regarding transfer of the team's ownership to Chouest will take place Wednesday afternoon.
Chouest, a billionaire businessman who built Edison Chouest Offshore into a major player in the oilfield service industry, has been negotiating to increase his 25 percent stake in the Hornets since mid-April when it became evident Shinn was ready to sell his remaining 75 percent.
Shinn, who founded the Hornets in 1988 in Charlotte, N.C., this year underwent successful prostate cancer surgery and sources indicated last month Shinn wanted to move his life in another direction of speaking with, and encouraging cancer patients during their battle with the disease.
Talks have dragged on for three weeks or more while the two sides haggled over the value of the franchise. The latest estimation of its worth, by Forbes Magazine in December 2009, listed the value of the Hornets at $285 million. The Charlotte Bobcats, which the magazine estimated to be worth $284 million, recently sold to former star Michael Jordan for $275 million.
On April 23, Chouest and Shinn were reported to be at an impasse in their discussions because of a disagreement on the team's worth and Shinn reportedly was seeking other investors.
Early last week, however, it was obvious that there were no other individuals in contact with Shinn and talks with Chouest resumed.
New Orleans Hornets sale to billionaire Gary Chouest should get quick NBA approval
The sale of the New Orleans Hornets to billionaire Louisiana businessman Gary Chouest is expected to receive quick approval from the NBA because Chouest's background and resources were vetted by the league before he became a minority owner in 2007 when he purchased 25 percent of the club from George Shinn.
Chouest's precise net worth is not known because his company, Edison Chouest Offshore, is not a publicly traded concern.
However, many sources in the New Orleans area have indicated that Chouest's financial resources are vast, easily in the 10-figure range, and that for the first time in the franchise's history, money concerns would not be the primary focus of coaching or player transactions.
According to already published figures, the NBA has just eight other owners who are billionaires.
NEW ORLEANS -- New Orleans Hornets majority owner George Shinn has reached a deal to sell his shares of the team to minority owner Gary Chouest, according to a person familiar with the negotiations.
The club is planning an announcement on Wednesday afternoon, the person told The Associated Press on Monday, speaking on the condition of anonymity because no official announcement has been made by either party to the sale.
A call to Chouest was not immediately returned.
Chouest is a Louisiana native and owner of Edison Chouest Offshore, a company that builds and operates marine vessels for the offshore oil and gas industries.
In 2007, when the team returned from a two-year stay in Oklahoma City because of Hurricane Katrina, Chouest bought 25 percent of the club for $62 million, saying at the time his goal was to keep the Hornets in Louisiana.
Shinn, who was treated for prostate cancer in recent months, decided to sell his remaining shares during the season.
His goal all along was to sell to Chouest, but nearly two weeks ago, Shinn became frustrated with the pace of negotiations and started looking for other potential buyers.
Chouest remained the leading candidate to buy the club, however, and a deal was finally reached for an undisclosed amount.
In its regular survey of professional franchise values, Forbes Magazine estimated last December that the Hornets were worth $285 million.
However, the magazine also listed the Charlotte Bobcats at $284 million, a higher figure than the $275 million Michael Jordan recently paid for the club.
Because Chouest's primary source of wealth is a thriving business in the energy industry, his ownership of the Hornets is likely to stabilize a franchise which has had a tenuous stay in New Orleans since moving from Charlotte in 2002.