It remains to be seen whether the bidders are ready to pay this price, but The Independent has been informed of a number of meetings between high net worth individuals and brokers since at least May, due to a growing feeling in industry circles that “the deal of the century could be done”.
Sir Jim Ratcliffe has already made its interest known publicly and is widely seen as the most likely buyer. His company, Ineos, which already owns OGC Nice, declined to comment when asked if it had held exploratory meetings over a bid. However, a spokesperson for the billionaire later confirmed to The temperature his interest in buying a stake in United in order to take full control of the club.
Earlier, United made a similar statement at the request of The Independent if the club was for sale, as many investors now believe.
United’s lack of comment stands in stark contrast to heated discussions over the matter privately. That is why Elon Musk’s social media joke caused such a stir. So many numbers are now so triggering of the situation. While clubs like this are rarely “officially” on the market, there has been a perceived shift in the Glazers’ stance.
A series of industry sources insist that the biggest takeover in the history of world sport is a strong possibility within one to two years. While the Glazers were previously reluctant to accept offers and United themselves dismissed such rumors until this week, a number of factors are believed to have influenced their stance.
Most relevant is the price of 5.24 billion euros paid by Todd Boehly, Clearlake Capital Group for Chelsea, what very few in the industry expected. The figure was all the more striking as it was a forced sale due to the sanction of Roman Abramovich after the invasion of Ukraine by Russia. A widespread expectation was that he would go for half that figure. This was considered a “game changer” and made many players take notice, including the Glazers.
The late entry of Ineos into the process of buying Chelsea, which ultimately went nowhere, has meanwhile been interpreted as a message to owners in the United States. The Ricketts family, owners of the Chicago Cubs, whose own attempt to buy Chelsea was damaged by leaked emails containing anti-Muslim sentiment, have also been mooted as potential buyers for the Old Trafford club. They haven’t responded yet. The Independent‘s questions.
Chelsea’s price is all the more promising for owners given the failure of the original European Super League plan, seen as one of the few remaining ways to inflate a mature market. Part of the plan was to immediately allow the clubs involved to trade nine to ten times their income, rather than three to four times as big Champions League clubs currently do. The failure of the Super League did not lead to more stagnation, however. Instead, despite Covid and the current economic climate, 2021 saw more investment in European football than 2019 and 2020 combined. The Glazers are reasonably expected to get more than Chelsea, which would represent a significant return on investment.
This feeds into the second factor, which is uncertainty in global finance. Up to £222.8 million from the Glazers’ debt is vulnerable to variable interest rates.
A section of the most recent quarterly report reads: “We are subject to interest rate risk on borrowings under our revolving facilities and our secured loan facility, which bear interest at variable rates. Changes in interest rates could affect the amount of our interest payments and therefore our future earnings and cash flows, assuming other factors remain constant.
“We have entered into an interest rate swap related to a portion of our secured term loan facility which involves the exchange of variable interest payments for fixed interest in order to reduce interest rate volatility. As of June 30, 2021, we had £162.8 million of floating rate debt outstanding under our secured term loan facility and £60 million of floating rate debt outstanding under our revolving facilities . We cannot assure you that any hedging activities undertaken by us will be effective in fully mitigating our interest rate risk on our floating rate debt.
Circumstances could theoretically see the sale of voting stock, at the very least.
Such uncertainty, along with the share price capitulation and unrest from sponsors, has led sources to say there has been increased talk about the future within the Glazer family.
Everything is happening 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 during Monday’s home game against Liverpool. The same game in 2020-21 saw the match postponed due to fan action, and will mean increased security next week. There was a feeling among other officials around the premier league that the situation is becoming more and more untenable. It all depends on the decisions made in Florida.
Even if the Glazers did eventually make 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 tense situation. There would then be the terms to be sorted. That’s why analysts place any sales process between one and two years. One feeling is that the next few months will involve “war games” as different parties defend their positions and jostle for value, before any process properly begins in early 2023.
Right now, however, it’s one of the biggest talking points in the football industry – and it didn’t need a Musk tweet for it.
Man Utd buyers surround growing optimism Glazing could finally sell
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