At least three syndicates are circling Manchester United with a view to a formal offer as belief grows the Glazers would sell the club for $6 billion.
It remains to be seen whether the bidders are willing to accept this price The Independent has been reporting on a string of meetings between high net worth individuals and brokers since at least May, as sentiment grows in industry circles that “the deal of the century could be in the making”.
Sir Jim Ratcliffe has already publicly expressed his interest and is widely believed to be the most likely buyer. His company Ineos, which already owns OGC Nice, declined to comment when asked if it had been in exploratory talks about an offer.
United offered a similar explanation when asked by The Independent whether the club is for sale, as many investors now believe.
The lack of public comment stands in stark contrast to the wild debates on the subject in private settings. This is why Elon Musk’s joke has caused such a stir on social media. So many numbers are now so hair-raising about the situation. While clubs like this are rarely “official” in the market, there has been a perceived shift in the Glazers’ position.
A number of industry sources insist that the biggest takeover in global esports history is very likely within the next year or two. While the Glazers have previously been reluctant to make offers and United themselves have dismissed such rumors up until this week, a number of factors are believed to have influenced their stance.
Most relevant is the €5.24 billion price paid for Chelsea by Todd Boehly, Clearlake Capital Group, which very few in the industry anticipated. The number was considered all the more striking given that it was a forced sale due to Roman Abramovich being sanctioned as a result of the Russian invasion of Ukraine. A common expectation was that it would go for half that number. It was seen as a “game changer” and made many in the game, including the Glazers, take notice.
Meanwhile, Ineos’ late entry into the Chelsea acquisition process, which ultimately came to nothing, was interpreted as a message to United owners. However, it is understood that they would be reluctant to go to €6bn. The Chicago Cubs-owning Ricketts family, whose own attempt to buy Chelsea was marred by reports of leaked anti-Muslim sentiment emails, have also been mooted as potential buyers of the Old Trafford club. They haven’t answered that yet The Independent‘s questions.
The Chelsea price is all the more promising for owners given the failure of the original European Super League project, seen as one of the few remaining opportunities to inflate a mature market. Part of the plan was to immediately allow the clubs involved to trade at nine to ten times their earnings, rather than three to four times what the big Champions League clubs are currently doing. However, the failure of the Super League has not led to more stagnation. Instead, despite Covid and the current economic climate, 2021 saw more investment in European football than 2019 and 2020 combined. There is a reasonable expectation that the Glazers could get more than Chelsea, which would represent a significant return on their investment.
This feeds into the second factor, the uncertainty in global finance. Up to £222.8m of the Glazers’ debt is vulnerable to variable interest rates.
A section of our most recent quarterly report states: “We are subject to interest rate risk on borrowings under our revolving facilities and our secured credit facility, which bear interest at floating rates. Changes in interest rates could affect the level of our interest payments and, accordingly, our future earnings and cash flows, provided other factors remain constant.
“We have entered into an interest rate swap on a portion of our secured loan facility that involves swapping variable for fixed rate payments to reduce interest rate volatility. At 30 June 2021 we had £162.8m of floating rate debt under our secured credit facility and £60m of floating rate debt under our revolving facilities. We cannot assure you that all of the hedging activities we have entered into will be effective in mitigating our interest rate risk on our floating rate debt.”
The circumstances could theoretically at least provide for the sale of voting rights.
That uncertainty, along with the stock price capitulation and sponsor riots, has led to sources claiming there have been heightened discussions in the Glazer family about the future.
All of this is taking place in an increasingly hostile atmosphere around the club. A disastrous summer on and off the pitch will bring much greater support for a protest against the owners at Monday’s home game against Liverpool. Same game in 2020-21 the game was postponed due to fan actions and will mean increased security next week. There is a feeling among other Premier League officials that the situation is becoming increasingly untenable. It all depends on decisions in Florida.
Even if the Glazers ultimately agreed to a sale, the process would take much longer than Chelsea’s.
Due diligence on a club of this size would take six months in a non-geopolitically strained situation. Then the terms would have to be sorted. For this reason, analysts estimate each sales process to take one to two years.
Right now, however, it’s one of the biggest talking points in the football industry – and it didn’t take a Musk tweet for that.
https://www.independent.co.uk/sport/football/man-utd-sale-news-glazers-b2146837.html Man Utd buyers circle amid rising optimism could finally sell Glazers