Glazer's style is more mouth than money

The financially challenged offer for Manchester United by American Malcolm Glazer and his band of ambitious children is not the first time the secretive family has aimed to buy something without apparently having the money to pay for it.

In 1998, Zapata Corp, the Glazers' publicly traded holding, became the laughing stock of Wall Street when it launched an all-share takeover offer worth $1.7 billion (£950 million) for what was then high-flying Internet portal Excite.

The only problem was that the stock market value of Zapata - best known as the petroleum-turned-fish-oil company founded by George W. Bush's father - was just $260 million at the time.

Chief executive Avram Glazer hailed the Excite deal as a major step for Zapata towards becoming the next Yahoo!

'We're going to rapidly acquire and consolidate internet businesses on a scale never before seen,' he proclaimed. 'Our goal is to become one of the premier internet companies in the world.'

Excite promptly dismissed the offer as a publicity stunt, analysts joked about Zapata getting its fish oil confused with snake oil and the offer was consigned to the dustbin of cyberspace.

Zap.com, the Zapata subsidiary that spent millions acquiring websites, essentially closed down when the internet bubble burst and is described in Zapata's most recent reports as a shell company.

If that little bit of history has been largely forgotten, questions about the family's greed at the expense of minority shareholders have been harder to erase.

Zapata Corp's books show exceedingly generous payments to Glazer and his four children on the board of a company that habitually lags its peers in terms of stock market performance.

In fact, there is little net income left over for shareholders to enjoy after monthly payments of $122,500 plus medical benefits to retired chairman Malcolm; $600,000 a year to the president and chief executive, his son Avram; generous stipends to director siblings Edward, Darcie and Bryan; and a healthy employee pension scheme.

These schemes have not gone unnoticed by investors. Shareholder message boards display a bitter streak with one poster headlining the opinions: 'These bastards belong in jail' and 'Glazer worth $1 billion by screwing everyone.'

The Glazers, who have denied any wrongdoing, have over the years fought off several shareholder lawsuits alleging that they defrauded investors.

One major shareholder became so frustrated with the Glazers three years ago that it wanted the company dismembered. New York-based Gates Capital Management, which owned 2.2% of the outstanding shares in Zapata Corp, asked that shareholders be allowed to vote on a proposal to liquidate the company because 'clearly management's record in making investment decisions for the company has not been very good and does not deserve to be continued'.

It added: 'Zapata is merely a holding company with absolutely no business operations of its own, yet it spends more than $4 million per year in overhead expenses, more than half of which is to pay salaries to members of the Glazer family.'

Zapata's board of directors, controlled by Glazer and his children, opposed liquidation because 'it is not in the best interests of the stockholders'. It did not say which stockholders.

While these matters could be dismissed as history, the question remains: 'How will they pay for Man U?' If calculations by Forbes magazine are correct, more than three-quarters of Glazer's estimated wealth of $1billion is tied up in the slumping Tampa Bay Buccaneers American football team.

But the family cannot tap that equity unless it sells the 2003 Superbowl champions, something it has insisted it will not do. And National Football League rules prevent it from using the Buccaneers as collateral for any other deals.

Zapata, half-owned by the Glazers, is worth just $143 million and their property arm, First Allied, may not be worth much more than that. It is hard to know because the Glazers are so secretive about their wealth.

United fans have every right to demand if Glazer's approach is in the club's best interests and how the prospective US owners could possibly afford to bolster the franchise and buy new players.

The family's record, apart from one glorious season for the Tampa Bay Buccaneers, is far from reassuring.