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United sale moves to next stage

Manchester United’s prospective buyers are due to hold face-to-face talks with Raine, the bank handling the sale for the Glazer family, and club officials at Old Trafford in the next fortnight.

These discussions are being billed as “stage two” of the process: a deep dive into the club’s finances, when all of United’s commercial secrets are revealed, to select eyes, under a cloak of secrecy.

Neither of the two publicly-declared bids are anywhere near Raine’s minimum enterprise value of £6billion, with Sheikh Jassim believed to be in the region of £4.5billion ($5.3bn) and Ratcliffe at around £4.3billion ($5.1bn).

However, while their valuations of United are similar, the two bids are very different — Sheikh Jassim wants to buy the entire club in cash, including the 31 per cent of the company not owned by the Glazers; Ratcliffe is only proposing to buy the Glazers’ shares, and doing so with a mix of cash and new borrowing.

If anything, indicative bids tend to come down after due diligence is carried out, in the same way that house-buyers often try to knock something off their offers after seeing a surveyor’s report on the property concerned.

Sheikh Jassim — and Ratcliffe, for that matter — can rightly point out that their valuations already reflect a huge premium on the average share price over the last year, and the recent surge in the club’s market capitalisation has been created by their interest in the club. If they were to pull out, where do you think the share price will go?

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