Manchester United takeover: ‘No assurance’ the Glazers are going anywhere

For all the talk of a Qatari revolution or a local-lad-turned-billionaire buying Manchester United, it has been quite the week at Old Trafford.

Season ticket prices are going up for the first time in over a decade, the club’s share price on the New York Stock Exchange (NYSE) has taken a turn for the worse after a positive spike before Friday’s soft deadline for potential bidders and, oh yeah, the Glazer family are still firmly in control.

It does, however, feel somewhat incongruous to describe them as the ‘Glazer family’ considering the siblings are split on what to do with United.

Joel and Avram Glazer, the executive co-chairmen, are reluctant to sell. Avram has recently given the impression that he is, in his own way, still emotionally invested in the club. Their problem is they are unable to personally buy out Kevin, Bryan, Edward and Darcie, the four members of the family who no longer want the attention of owning a club the size of United and wish to cash in their enormous profit.

In October 2021, Edward and Kevin sold a combined 9.5 million shares at $16.98 (£14.12), earning the pair around £117million.  “Manchester United will not receive any proceeds from the sale of any Class A Ordinary Shares by the Selling Shareholders,” a United statement read at the time.

The Glazers’ overall shareholding in United stands at 69 per cent.

Since Friday’s deadline, only two interested parties have gone public with their bids to buy the club. Sources involved in the process — who will, like all sources in this piece, remain anonymous to protect their positions — believe there are no other private bidders at this stage.

Sir Jim Ratcliffe, the British multi-billionaire who generated his wealth through chemicals firm INEOS, has come forward with a proposal to Raine, the merchant bank facilitating a potential sale. The other public bid is from Sheikh Jassim Bin Hamad Al Thani, the chairman of Qatari bank QIB.

Manchester United takeover…

Ratcliffe’s bid is directed solely at the shareholding owned by the Glazers (that 69 per cent of United), which gives majority control and therefore the keys to decision-making at Old Trafford. Sheikh Jassim, however, “confirmed his submission for 100 per cent” of the club.

The bidding war the Glazers might have hoped for, though, does not appear to have materialised.

Adding to that, on Tuesday, Wall Street had a pretty terrible day, dropping two per cent, with United’s market value on the New York Stock Exchange falling $530million (£438.2m).

It is worth noting a company with a share price being held up by speculation, which is relevant in United’s case, tends to take a much bigger hit than a company with a share price underpinned by performance fundamentals. Another element worth remembering is in August, shares in the club cost $10.60. They are now hovering around $23, so the increase remains significant despite Tuesday’s drop.

So, is there now an element of ‘Hang on… might the Glazers stick around’? 

Those involved in the takeover process aired their concern over whether the Glazers would sell United. Several others within the industry, disconnected to each other, have echoed similar.

A number of soft signals have been perceived by close observers, such as the ticket price rise (more of which later) and reports of the Glazers requesting bidders keep public statements about their United record cordial. Would the Glazers care about the reputation of their United ownership if they are leaving?

It has been speculated this process could be a way for Joel and Avram to assess the market interest in United and use that raised valuation — through the stock market surge — to gain more favourable terms from lenders, siphoning any borrowed money to the four siblings who want out. It must be remembered that the Apollo talks, which ended without a deal, were the first sign last summer of the thinking among the family. Quite how stadium finance would fit into this theory is unclear.

Investors who make up the 31 per cent of remaining shares are following events closely. They would be due a healthy profit if Sheikh Jassim’s bid is successful because he is promising to acquire the whole club at a reported price higher than the current market value. The process would be a merger, with the price to shareholders dictated by how much the Glazers sold for. People who have bought at the higher end of United stock could face major losses though if the Glazers remain, with the share price inevitably falling more.

There is a question over how the Qataris might react to being turned down after being given encouraging indications. It is possible the uncertainty emanating is a tactic to squeeze more from the bidders.

“I still think it is a possible rather than a probable,” says Kieran Maguire, who lectures on football finance at the University of Liverpool and is behind the Price of Football blog and podcast. 

“It is possible because they (the Glazers) are convinced that Manchester United is worth an absolute fortune and if other people don’t share that view, then why sell?”

Let’s remind ourselves what the American family said in November when they announced they were commencing a “process to explore strategic alternatives for the club”.

“There can be no assurance that the review being undertaken will result in any transaction involving the Company,” read the final paragraph of the statement issued by the Glazers.

It is a statement worth bearing in mind — even if it is not what many Manchester United fans will want to hear.

Depending on who you talk to, the price the Glazers want to obtain before selling United varies. Some say they want in the region of £8billion, while others indicate it is closer to £6bn but that they could go as low as £5bn. Joe Ravitch, the Raine banker leading the negotiations, is said to have recommended they do not part with United for anything less than £6bn.

While neither Ratcliffe nor Sheikh Jassim have confirmed the value of their bid, figures more in the region of £4.5billion have been mooted.

“I think there is a reluctance to overpay from the people that have bid to date,” says Maguire. “The Glazers had hoped to get into a testosterone bidding war between the different potential bidders. That is not really Jim Ratcliffe’s scene because he knows value.

“From what we know about Sheikh Jassim, he is from a banking background and will be reluctant to overpay. Manchester United are not worth £6-8billion as a business, but they might be worth £5billion as a trophy asset.”

One development that has gone under the radar is the proposal put forward by Elliott Investment Management, the US hedge fund, which could pave the way for the Glazers to retain control of United.

The hedge fund contacted Raine, offering to help finance any takeover, while also indicating it would provide finance to the Glazers should a sale fail to go through.

This leaves the door wide open for the current owners to stay.

If they were to accept a capital injection from Elliott, this could be used to pay down the net debt of United, which sits at £656million, although this is viewed as unlikely. The club also owes more than £200million in transfer fees.

There would be scope for any cash injection to be used in the prospective redevelopment of Old Trafford. However, should the American family go down this route, they would merely be changing who they owe money to, rather than clearing any of that debt. The Glazers’ ownership has cost United around £1.5billion in interest payments, dividends, and gross debt.

Elliott, run by Paul Singer, last year completed the $1.2billion sale of AC Milan to the private equity firm Redbird. It initially took control of the Serie A side in 2018 after helping to finance a takeover by the Chinese businessman Li Yonghong, who then failed to meet repayments.

There was a willingness from Elliott — which feels it is experienced in this sector as an owner and putting up capital to help others — to provide financing to Nick Candy’s failed bid to buy Chelsea.

It is unlikely Elliott is the only firm offering to finance a takeover or help to fund the Glazers, with a lot of hedge funds operating in this space.

If you wanted to raise season ticket prices for the first time in over a decade but were worried about the reaction, when would be a good time to announce it?

When everyone is talking about who will buy the club, of course.

“The timing is very strange because you are effectively committing the new owners to those revenues coming in,” Maguire said. “If the Glazers wanted to sell and they were confident a deal was proceeding, then why not leave it to be somebody else’s problem?

“The alternative would have been to freeze them for another year and give the new owners a hospital pass by making them inherit the problem and decide whether the prices should go up.

“It is a way of giving the Glazers a sort of insurance policy because if they don’t sell the club, then they have an extra five per cent coming in next year.

“Something that could have agitated and mobilised the opposition becomes a sideshow because all the focus is on the club’s sale. Sometimes it is a good time to bury bad news, and this would appear to be exactly that in operation.”

Raising season ticket prices was often seen as one of the few remaining ways for the Glazers to increase United’s revenue. The club said it was a necessary move for 2023-24 to ensure they can continue operating on a sustainable basis and highlighted how the cost of delivering matches has risen by 40 per cent in the last five years.

Although prices are going up, the club still has a staggering number of supporters waiting to get their hands on a season ticket. The Glazers, in that regard, are well protected — despite the animosity towards their ownership model.

“It was another strong year for ticket demand,” Collette Roche, United’s chief operating officer, said in September, as the club said they recorded more paid membership sign-ups — exceeding 275,000 globally — than ever before. “With over 135,000 people on our waiting list for Season Tickets, supporter loyalty is something that we never take for granted.”

If you consider the demand for tickets, the number of people paying to be members and, according to United, surpassing one billion global fans, why would the Glazers be willing to walk away if their valuation is not met?

And when you add the fact Erik ten Hag’s team is still in the hunt for a Premier League title and has a chance to lift some silverware this weekend, it might be tempting to think how success on the pitch could take the pressure off them and add value to United.

Different supporter groups, though, made their minds up long ago. They have considered organising more anti-Glazer protests and could yet come together, united in wanting the Glazers out.

But while supporters remain optimistic about Glazernomics coming to an end, it could be premature to be waving goodbye to the American family just yet.

Additional reporting: James Horncastle

 (Top photo: LINDSEY PARNABY/AFP via Getty Images)