BUY THE CLUB OURSELVES?
The Sunday Times say that moves are afoot
Manchester United supporters hope to thwart Malcolm Glazer’s attempt to buy the club by pulling off a coup which would see them assume power at United themselves. The fans will launch their audacious plan if, as expected, Glazer makes his long-awaited takeover attempt of United by the end of this week.
Fans currently control at least 10% and as much as 18% of United through the supporters trust, Shareholders United (SU), and will need to raise a minimum of £50m to execute their plan to take their stake beyond 25%, the level they believe necessary to block the American tycoon.
Advised by major mergers and acquisitions firm, Weil, Gotshal & Manges, they say they are "highly confident" of pulling off a deal with a leading City institution willing to lend them the money, which they propose to pay back by persuading thousands of their 26,500 members to take out relatively small personal loans.
Following talks with United, they hope to offer the carrot of five-year fixed-price season tickets which could be purchased with part of these loans.
Shareholders United hope moral factors, and an offer to match or exceed any share price Glazer comes up with in a "tender bid" for a limited number of shares, would induce United investors such as the Scottish mining and property magnate, Harry Dobson, and perhaps even John Magnier and JP McManus, to sell stock to them rather than Glazer. The millionaire and his sons, Joel and Avi, are bidding to seize complete control at Old Trafford and are likely to offer 300p per share in a deal which would value the club at £750-800m and he had been expected to entice shareholders such as the Irish racing magnates, Magnier and McManus.
However, the supporters have developed a strategy to gazump any price Glazer comes up with while buying a limited number of shares.
Glazer, who has already spent more than £200m to amass 28.11% of United, is proposing to borrow the majority of the £540m or so he needs to buy the club and under company law cannot carry out his plan to transfer this debt over to United once he has bought them without shareholders passing a special resolution. He needs 75% of the votes to do this. United fans believe that if they can take their own stake in the club to beyond 25% they will ward the American off.
The fans are still hoping current campaigns aimed at dissuading Glazer’s backers and pressuring the United board to reject his proposal, will be enough to stymie the controversial tycoon, and the potential difficulties for a voluntary organisation such as SU of pulling off so big a deal in such a short period of time means a counter-bid to Glazer remains Plan B.
Even if the American is repulsed, however, the fans will press ahead with a strategy of buying 25% of United, only over a longer and more manageable timescale. With such a stake in the club they would have an effective veto over future major decisions, such as ground expansion and the choice of the next United manager.
The United fans want to build a stake that would give them a veto over major decision- making at Old Trafford in perpetuity. They see this as the only long-term way to stop their club falling into the "wrong" hands. Glazer is the latest in a list of unpopular outsiders who have sought to buy power at United that includes McManus and Magnier and stretches back to Michael Knighton in the early 1990s.
None of them, not even Rupert Murdoch, foiled by supporters when BSkyB tried to buy United in 1998-99, was as unpopular as Glazer, whose plan to pay back his borrowing through season ticket revenue — and likely price hikes — has caused particular resentment.
Since Glazer mounted his first serious takeover attempt in October, the membership of Shareholders United has increased from 8,000 to 26,500, and only last week the group was able to make a £500,000 purchase of shares. The fans would borrow their £50m by forming a tender vehicle that would be lent money by a City institution, then spread the debt between thousands of members who would make donations or tak e out personal loans. A carrot to get as many supporters involved as possible may be to link this to a debenture scheme under which individuals would be able to buy five-year, fixed-price season tickets.
The fans have other plans to fund their share purchase. They are understood to have had talks with United’s shirt sponsor, Nike, to introduce a voluntary levy on shirt sales, similar to schemes commonplace in the music business with charity singles, where a percentage of the price of a record goes to good causes. Fans would elect to add £1 or £2 to the cost of buying a United replica jersey, with the extra money going to the supporters’ trust.
Other plans include raising money through testimonial matches at Old Trafford. In October one individual donated £750,000 in shares to Shareholders United, and the group hopes to draw backing from similar wealthy supporters or "Red Knights".
THE OBSERVER SAY THAT GLAZER IS READY
Malcolm Glazer, the US sports tycoon, is close to launching his long-awaited £800 million bid for Manchester United, according to City sources last night.
NM Rothschild, which is advising Glazer, is expected to thrash out terms with United's broker, Cazenove, at the end of this week.
If things go well, there could be a meeting between Glazer's son, Joel, who is spearheading the bid, and United board members a few days later. The summit is likely to be in London.
Industry sources say that United's chief exec, David Gill, would like to have something to tell investors when the club publishes its interim figures on 22 March. But it is by no means certain that a formal offer will have been tabled by then.
It is believed that Rothschild was satisfied with the results of its due diligence, a process which it completed 10 days ago. Some analysts say that Glazer may offer more than the mooted 300p a share in order to encourage JP McManus and John Magnier, the Irish horse-racing millionaires, to sell their 29 per cent stake. Without the support of the Irish, the Glazers will be unable to secure the club.
Sources say that the American family is happy to retain a listing for up to 25 per cent of United's equity to enable the fans to retain a financial stake in the fortunes of the club.
THE SUNDAY MIRROR CLAIM THAT COOLMORE WON'T SELL TO GLAZER
Malcolm Glazer's £800million takeover bid for Manchester United is in tatters.
Major Old Trafford shareholders Cubic Expression are not prepared to sell their stake in the club.
Sunday Mirror Sport understands representatives acting on behalf of Irish racehorse owners John Magnier and JP McManus have told supporters' groups their holding company, Cubic Expression, will reject Glazer's proposal to buy their 28.9 per cent shareholding.
Magnier and McManus, who own the Coolmore stud in Tipperary, believe Glazer has undervalued United by tabling an offer which would have given them £3 per share - even though that would have given the Irish duo a profit in the region of £100m.
They have made it clear they value United's shares at £3.50, meaning the American would need to raise £1billion to complete a takeover. On Friday afternoon United shares were trading at £2.74 on the Stock Exchange.
Glazer, 76, was banking on his latest proposal being accepted - putting him on course to gain control of the club even if United chief executive David Gill and his board were to refuse to recommend his revised bid.
The Coolmore pair have made it clear they will not be prepared to sell at anything less than £3.50 per share - a figure which puts United out of the reach of the Glazer clan.
The Americans saw a first bid rejected by United's directors because it was being financed by too much debt - in the region of £500m. It is understood that their alternative offer will be backed by about £300m of borrowing against future profits.
That is also unlikely to be recommended by the Old Trafford board because it hinges on aggressive marketing practices which would include increasing ticket prices.