At least three consortiums are circling Manchester United with a view to a formal bid, as belief grows the Glazers would sell the club for $6bn.
Whether the bidders are willing to pay that price remains to be seen, but The Independent has been told of a number of meetings between high-net-worth individuals and brokers since at least May, due to a growing feeling in industry circles that “the deal of the century could be on”.
Sir Jim Ratcliffe has previously made his interest publicly known and is widely considered the most likely buyer. His company, Ineos, which already owns OGC Nice, refused to comment when asked whether it had conducted exploratory meetings about a bid. However, a spokesperson for the billionaire later confirmed to The Times his interest in buying a stake in United with the view to taking full control of the club.
Earlier, United offered a similar statement when asked by The Independent whether the club was up for sale, as many investors now believe.
The lack of commentary from United is in stark contrast to the wildfire discussions on the issue in private. It is why Elon Musk’s joke on social media caused such ructions. So many figures are now so hair-trigger about the situation. While clubs like this are rarely “officially” on the market, there has been a perceived shift in the Glazers’ position.
A series of industry sources insist the biggest takeover in global sports history is a strong possibility within the next one to two years. Whereas the Glazers had previously been reluctant to entertain offers, and United itself has been dismissing such rumours up to this week, a number of factors are understood to have been influencing their stance.
The most relevant is the €5.24bn price paid by Todd Boehly, Clearlake Capital Group for Chelsea, which very few in the industry expected. The figure was seen as all the more striking because it was a forced sale due to the sanctioning of Roman Abramovich after Russia’s invasion of Ukraine. A widespread expectation was that it would go for half that figure. It was seen as a “game changer” and made many in the game, including the Glazers, take note.
Ineos’s late entry into the Chelsea purchase process, which ultimately went nowhere, was meanwhile interpreted as a message to the United owners. The Chicago Cubs-owning Ricketts family, whose own attempted purchase of Chelsea was damaged by reports of leaked emails that contained anti-Muslim sentiment, have also been mooted as potential buyers of the Old Trafford club. They have not yet offered a response to The Independent’s questions.
The Chelsea price is all the more promising for owners given the failure of the initial European Super League project, which was seen as one of the few remaining ways to inflate a mature market. One part of the plan was to immediately allow involved clubs to trade at nine to 10 times their revenue, rather than three to four times in the way the major Champions League clubs currently do. The Super League’s failure hasn’t brought more stagnation, though. Instead, despite Covid and the current economic climate, 2021 saw more investments in European football than both 2019 and 2020 combined. There is a fair expectation the Glazers could get more than Chelsea, which would represent a significant return on their investment.
That feeds into the second factor, which is the uncertainty in global finance. Up to £222.8m of the Glazers’ debt is vulnerable to variable interest rates.
A section of the most recent quarterly report reads: “We are subject to interest rate risk in connection with borrowings under our revolving facilities and our secured loan facility, which bear interest at variable rates. Interest rate changes could impact the amount of our interest payments and accordingly, our future earnings and cash flow, assuming other factors are held constant.
“We have entered into an interest rate swap related to a portion of our secured term loan facility that involves the exchange of floating for fixed interest payments in order to reduce interest rate volatility. As of 30 June 2021, we had £162.8 million of variable rate indebtedness outstanding under our secured term loan facility and £60m of variable rate indebtedness outstanding under our revolving facilities. We cannot assure you that any hedging activities entered into by us will be effective in fully mitigating our interest rate risk from our variable rate indebtedness.”
The circumstances could theoretically see the sale of voting rights shares, at the very least.
Such uncertainty, as well as the share price capitulation and sponsor unrest, has led to sources claiming there has been increased discussion about the future among the Glazer family.
It all comes amid an increasingly hostile atmosphere around the club. A disastrous summer both on and off the pitch will bring much greater support for a protest against the owners at Monday’s home match against Liverpool. The same fixture in 2020-21 saw the game postponed due to fan action, and will mean increased security next week. There has been a feeling among other officials around the Premier League that the situation is becoming increasingly untenable. It all depends on decisions in Florida.
Even if the Glazers did ultimately settle on a sale, though, the process would take much longer than Chelsea’s.
The due diligence on a club of this size would take six months in a non-geopolitically-strained situation. There would then be the terms to sort. It is why analysts are putting any sales process at anywhere between a year to two years. One feeling is that the next few months will involve “war games” as the various parties stake their positions, and jostle for value, before any process properly begins at the start of 2023.
Right now, though, it is one of the football industry’s major talking points – and it didn’t need a Musk tweet for that.
