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.