The takeover saga of Manchester United is set to rumble on for some time yet as the deadline for second bids passed on Wednesday evening without fresh submissions.
The Glazer family, owners of Manchester United since 2005, are looking to sell the club and instructed the Raine Group, the US firm that led on the expedited sale of Chelsea last year, to facilitate the sale of the Old Trafford side.
Two serious bidders have emerged from the process, with the Qatari-led bid of Sheikh Jassim Bin Hamad Al Thani, the chairman of the Qatar Islamic Bank, and British billionaire and founder of international chemicals company INEOS, Sir Jim Ratcliffe, both vying to take over the club.
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Initial bids were presented earlier this month but, with those bids understood to be in the region of £4.5bn, they fell below what the Glazer family would accept to sell their majority stake in United. The US owners, who have been deeply unpopular with fans of the club ever since their leveraged buyout back in 2005 that loaded hundreds of millions of pounds worth of debt onto the club, are believed to be seeking between £5bn and £6bn.
Sky Sports reported on Wednesday evening, after the soft 9pm deadline, that new bids had not been submitted but that both parties had been given an extension to the deadline to present new offers. No fixed timeframe was placed on the extension.
For Liverpool owners Fenway Sports Group, they will be keeping a keen eye on what happens with the Manchester United sale given that they themselves are looking to sell part of their shareholding in the Reds.
Last month FSG principal owner John W. Henry revealed that a full sale was not being explored, and in an exclusive interview with the ECHO earlier this month Henry himself declared that the commitment of the ownership group to Liverpool was “stronger than ever” and that the formalisation of the search for fresh capital through a new partner in the club had “identified potential investors”.
The investment search for Liverpool has moved on from its initial stage with some potential partners having emerged through the process, although the timescale on when any deal will be struck is not yet known. There is understood to be a desire to secure investment by the summer, although transfer plans will likely not be predicated on the ability to close any deal by then.
But the sale of Manchester United, if it does happen, is one that will be impactful for FSG and Liverpool given that it would provide them with a real marker in terms of the valuation of their own club.
Among several prominent US investors that the ECHO have spoken to in recent months there has been the feeling that the deal for Chelsea was done so at an inflated price (£2.5bn with £1.75bn to be committed to infrastructure development in the future). That high price stemmed from the small window of opportunity for bidders given the need for the expedited sale given the sanctions placed upon former Chelsea owner Roman Abramovich following Russia’s military invasion of Ukraine. That created a potential cash flow issue given that Abramovich’s assets had been frozen and the club were heavily reliant on his ongoing financial support.
The extraordinary nature of the process smoked out those interested in acquiring major Premier League assets and saw consortiums cobbled together in quick fashion in order to get bids on the table.
But the fervour around the Chelsea sale has not been seen around Manchester United or Liverpool, two major assets that are valued as much as twice as Chelsea by some estimations. When dealing with assets of that size it makes the pool of potential owners far more shallow.
Liverpool’s preference all along has been one of a partial sale, something that well-placed ECHO sources have maintained throughout.
Quite how much FSG would be willing to give away is another point that as yet doesn’t have real clarity, although it is likely to fall around the 15 to 25 per cent mark if the idea was to realise a large chunk of capital to aid both squad rebuilding efforts and to efforts to add further to infrastructure, potentially through real estate.
FSG will be looking at the Manchester United sale process and hoping that the Glazers get a price far closer to the £6bn that they were initially said to want, although that particular figure seems incredibly unlikely, especially given that another £1.5bn plus would likely be required to either redevelop Old Trafford or build a brand new stadium. Then there is the hit of the transfer windows. Chelsea have spent more than £500m on transfer fees under the ownership of Todd Boehly and Clearlake Capital, meaning that more than £3bn has already been spent on the project.
FSG are understood to value Liverpool north of £4bn given the strength of team valuations across major sports, particularly in the US, and some equity research from sports finance publications including Sportico and Forbes.
The higher the value for Manchester United the stronger the bargaining power of FSG when it comes to the valuation of Liverpool, which will impact the value of a minority stake.
Speaking at the Financial Times Business of Football Summit in London earlier this month, Mike Forde, executive chairman at Sportsology, a firm that works with team owners, leagues and institutional investors, stated his belief that the market was still one geared towards sale rather than investors taking minority stakes.
“There has been a market created to allow LP liquidity to allow an owner to take money off the table, sell five, 10, 15 or 20 per cent,” said Forde.
“It has allowed the market to create value. If Manchester United sells for the first time in 20 years, Chelsea sells for the first time in 20 years, that’s your marker. The LP liquidity market allows that on a more regular basis, and that is a fast moving space.
“If Manchester United and Chelsea were assets in North America with the rules and the structure around it they would be gone in seconds. That tells you that the market here is still a sale market and not an LP liquidity market when it comes to the big assets. I think the quicker the teams and the leagues solve that then it becomes a new asset class that is appealing in nature to institutional investors, high net worth individuals and family offices etc.”
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