U.S. tycoon Glazer takes control of Manchester United
U.S. investment tycoon Malcolm Glazer finally seized control of Manchester United after a drawn-out and bitter battle, buying out its biggest investor and amassing a 70 percent stake in the world's richest football club in a deal valuing it at £790 million.
Red Football Ltd, acting on behalf of the U.S. tycoon, agreed to buy the 28.7 percent stake in United from Cubic Expression, the investment vehicle of Irish race horse magnates John Magnier and J.P. McManus, for 300 pence a share.
The deal with the Irish duo marks the end of a two-year battle for Glazer, who has twice had his plans to win control of the 15 times English football champions rebuffed, but it sparked any angry reaction from United fans who promised to fight on.
Glazer's advisers quickly moved to buy up the remaining shares on Thursday. Sources close to the deal said Glazer had raised his United stake to around 70 percent, while they were confident of reaching a key 75 percent level within days.
Glazer, who already held 28.1 percent, took his stake to 56.9 percent with the purchase from Magnier and McManus and, in line with UK rules, launched a cash bid for the rest.
The Irishmen net a 70-million-pound profit.
United's third-biggest shareholder, Scottish mining millionaire Harry Dobson, later sold his 6.45 percent stake to the Glazer camp, according to sources close to the deal.
With a 50-percent plus majority, Glazer has effective control of the club, but with over 75 percent he can run the club unfettered and delist United's shares. At over 90 percent he can force out any remaining minority shareholders.
United said it was awaiting the terms of the offer before making any further announcement.
Shares in the 127-year-old northern English football club jumped 12.9 percent to close at 299-1/4p.
"Glazer is in the driving seat, although he's had to go a bit hostile without the board's approval," said Richard Bullas, a fund manager at Rensburg Investment Management. Rensburg holds some Manchester United shares in its small-cap fund.
Angry Fans
Fans' groups called a demonstration at United's Old Trafford ground, saying Glazer had no knowledge of the football side of the club and was only interested in its brand and revenue.
They fear his offer will saddle United with heavy debts, force up ticket prices and divert funds which could be used to buy players for the team, which will finish a disappointing third this season in the Premiership.
"He's got himself an extremely tainted asset -- this is by no means over," said Oliver Houston at supporters' pressure group Shareholders United. "Even if Mr Glazer succeeds in getting all-out control, the campaign by fans to show that no customers equals no profit will continue."
Last month, United said the Glazer approach was fair and reasonable but it did not believe the offer was in the best interests of the club because of the high level of debt in the bid and therefore could not recommend it to shareholders.
Glazer, the owner of American football team the Tampa Bay Buccaneers, and his sons Avi and Joel plan to heap up to 300 million pounds of debt on to the club's balance sheet, and raise the remainder of the cash with the help of banks.
Debt has crippled other less successful but high-profile English clubs and raised fears among fans.
Another source said the deal was struck over the telephone with the Irish investors late on Wednesday night with a deadline to transfer the money to their investment vehicle Cubic Expression by 1300 GMT on Thursday.
"They saw it as an investment. They got a very good deal," a spokesman for the publicity-shy Irish investors said.
Source: Reuters
Date: 07.05.05
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