Skip to main content

Some change at United

Ineos founderJim Ratcliffe is nearing a deal to take a 25 per cent stake in Manchester United, giving it an enterprise valuation somewhere between $6bn and $6.5bn — by far the highest ever for a football team.

If approved by the board, Ratcliffe’s arrival would be followed quickly by a capital raise to bring new money into the club. Ratcliffe and Ineos sporting director Sir David Brailsford would then take up two seats on a new committee to oversee the football operations, alongside current executive chair Joel Glazer.

Such an outcome offers something for almost everyone. Ratcliffe gets to sail into his childhood club and lead the effort to revive its fortunes. The Glazers get to stay in control of their lucrative asset while taking out a nice lump sum. They can ride the wave if Ratcliffe is successful, and have someone else to blame if he isn’t. Fans, though clearly divided on the idea, at least have the prospect of witnessing some change.

The people that may be wondering what’s in it for them are those holding New York-listed shares in United. The stock traded at around $13 before the Glazers announced their “strategic review” almost a year ago. In February, amid fevered speculation about a monster bid from Qatar, it shot up as high as almost $27 a share.

There have been some ups and downs since, but the latest news on Ratcliffe’s prospective entry has weighed on the stock price, which is down more than 10 per cent this week. At $17.50, it is now at its lowest since the review was announced.

Despite Ratcliffe’s high valuation, there are many unanswered questions about the mechanics of his offer. Investors positioning for a full buyout look set to for major disappointment, while the prospect of a further share sale could mean more dilution to come. With United’s commercial prospects not closely tied to events on the pitch, minority investors may well shrug at news of a sporting shake-up.

All this has been made possible by the nature of US takeover law, which appears to demand very little of a seller — at least that’s the case when the controlling shareholders have over 90 per cent of the voting rights. But those who bought shares would have known that all along.

 

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...
Post a Comment
Read more

Millwall punch above their weight

Millwall’s season was overshadowed by the tragic death of owner John Berylson following a car accident. The American had been an exemplary owner, beloved by the fans for his leadership, passion and generosity. Millwall’s finances had been pretty good during his tenure, which we shall explore by looking at the most recent accounts from the 2022/23 season, when the club narrowly missed out on a place in the play-offs after finishing 8th. Millwall’s pre-tax loss slightly reduced from £12.6m to £12.2m, as revenue rose £0.8m (4%) from £18.6m to a club record £19.4m and player sales improved from a £0.1m loss to £2.5m profit. However, other operating income dropped from by £1.1m from £1.3m to £0.2m, while operating expenses increased £1.7m (5%) from £31.6m to £33.3m. The main driver of the revenue increase was broadcasting, which rose £1.1m (12%) from £9.1m to £10.2m, though match day was also up £0.4m (7%) from £5.8m to £6.2m. In contrast, commercial fell £0.7m (19%) from £3.7m to £3....
Post a Comment
Read more