£800 million takeover battle for Man Utd

Jonathan Prynn, Business Editor @JonPrynn|Raoul Simons|Evening Standard

14 April 2012

Manchester United today electrified the world of football by revealing that it has received a takeover offer worth up to £800 million.

In a short statement to the Stock Exchange, the world's biggest football club confirmed having received "a preliminary approach regarding a possible offer for the company".

Although the statement does not identify the bidder, it is known to be Malcolm Glazer, owner of American football team the Tampa Bay Buccaneers.

News of the offer brought a furious response from supporters' groups, who vowed to fight any bid. They said they feared higher ticket prices if Mr Glazer won control of the club.

In the City, Manchester United's shares raced 9.75p ahead to 267p, valuing the company at £700million. City commentators said a "knockout" full takeover bid was likely to value the club at about £800million.

Mr Glazer, who is said to be worth about $1billion, already has a 19.2 per cent stake in Manchester United plc, the quoted company that owns the club. He has been sizing up a bid for many months but speculation reached fever pitch over the weekend when it emerged he had appointed US investment bank JP Morgan to advise on a bid.

However, a formal offer may yet be some weeks away. Today's statement refers to "a number of significant conditions" that need to be met before Mr Glazer will contemplate a takeover.

It went on to say the company was "seeking clarification of this proposal and at this stage it is unclear whether any offer will be made". In order to win control, Mr Glazer will have to persuade Irish racing moguls John Magnier and JP McManus to sell their combined 28.9 per cent stake.

Approximately 18 per cent of the shares are held by small investors, of which about half to two thirds are though to be hardcore Manchester United fans who will oppose the bid.

Jules Spencer, chairman of the Independent Manchester United Supporters Association, pledged to take any necessary measures to block the American. He said: "If Glazer wants a fight, we will give him one. We want to make it clear he is not welcome or wanted as owner of Manchester United."

There was some scepticism in the City about whether Mr Glazer would be able to command the financial firepower needed to pull off a bid.

Though immensely wealthy, he does not command the kind of riches boasted by Chelsea's billionaire Russianowner Roman Abramovich. Most of Mr Glazer's wealth is tied up in the Buccaneers and it is likely that he would have to borrow much of the cash for a takeover. This would be secured on Manchester United's future earnings from sponsorship deals, television rights and gate receipts.

Senior club officials are, however, believed to have held a number of meetings with the Glazer camp and relations are said to be "very constructive". The bid comes at a time when the club's finances appear to be in decline. Last week the company reported a 29 per cent fall in pre-tax profits to £27.9 million. There was also a warning of a further profit decline.