US tycoon lines up Man U bid

AMERICAN sports mogul Malcolm Glazer has hired investment bank JP Morgan to advise on a bid for Manchester United worth at least £650m.

Glazer, who already owns 19.2% of United - the world's richest football club - is expected to approach the board with a 'highly leveraged' offer in the next few weeks, according to sources. Bid preparations are said to be at an advanced stage.

Glazer will also seek the support of John Magnier and JP McManus, the Irish racing tycoons whose Cubic Expression investment vehicle is United's largest shareholder with a 28.9% stake.

And in a controversial move, Glazer plans to delist United's shares from the Stock Exchange. Any attempt to take United private will run into strong opposition from the club's fans, who between them own about 18% of the shares.

JP Morgan is advising Glazer, owner of the Tampa Bay Buccaneers American football team, on how to structure the deal.

Glazer was recently estimated by Forbes magazine to be worth $1bn (£560m), but it is believed that he will have to borrow heavily against United's assets to finance a bid.

This is likely to mean mortgaging United's guaranteed future income from long-term sponsorship deals with sportswear giant Nike and mobile phone group Vodafone. Season ticket sales, other gate receipts and income from TV deals are also likely to be 'securitised' in the same way.

Under Stock Exchange rules, Glazer is obliged to offer investors at least the same price at which he last bought United shares. That was on 23 June when he paid about 245p for 2.4m shares.

Manchester United directors met members of the Glazer family in Chicago this summer during the club's pre-season tour of North America and relations are said to be 'very constructive'.

A deal structured with United's income as collateral would help allay doubts that Glazer has the cash to mount a full-scale takeover.

Most of Glazer's wealth is tied up in the Buccaneers, which Forbes values at $779m. However, National Football League rules prevent owners from pledging a team's value as collateral and the Glazer family have denied reports that they are considering selling the team.

Zapata Corp, Glazer's publicly listed holding company, has a market value of just £79m.

United reported a 29% fall in annual pre-tax profits to £27.9m last week. Magnier and McManus are believed to be looking for an exit after winning their public row with United manager Sir Alex Ferguson over stud rights to champion racehorse Rock of Gibraltar.

JP Morgan's emergence behind Glazer coincides with the departure of Mehmet Dalman from the German investment bank, Commerzbank. Londonbased Dalman acted for Glazer during his recent stakebuilding in United, but has now left Commerzbank to set up his own hedge fund.

The shares closed last week at 257 1/4p, valuing United at £675m.

In March, Glazer said he had 'no current intention to make an offer' but reserved the right to make a bid at any time.

Neither JP Morgan nor Glazer would comment.