Manchester United and Ratcliffe to confirm stake sale next week

Business

Manchester United Football Club and Sir Jim Ratcliffe, the petrochemicals billionaire, aim to announce within days a £1.25bn deal that will see him take a 25% stake in the Red Devils.

Sky News understands that the two sides have pencilled in early next week to confirm the long-awaited transaction, which will involve Sir Jim’s Ineos Sports taking two boardroom seats at Old Trafford.

Sources said the timetable could yet slip again, but that an announcement early next week was now expected by both United and Ineos.

Neither Sir Jim nor Sir Dave Brailsford, the former cycling supremo who heads Ineos’s sporting operations, is expected to join the club’s public company board.

The $33-a-share deal, which Sky News revealed details of last month, will be structured as a tender offer to acquire 25% of the listed A-shares.

The Glazers will also sell 25% of their B-shares, which carry greater voting rights, to Sir Jim as part of the deal.

Sir Jim Ratcliffe plans to commit $300m (£245m) from his multibillion pound fortune to United’s ageing infrastructure as part of the transaction, with the bulk of that capital being handed to the club in the near term.

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However, United’s home is likely to need far more than £245m to deliver the overhaul that is required to turn it into one of the world’s elite football stadia once more.

Image:
Sir Jim Ratcliffe is seen on a visit to Old Trafford

It will be financed personally by the billionaire and will not add to Manchester United’s existing borrowings.

Sir Jim’s purchase of a 25% stake in the Red Devils will be confirmed more than a year after the Glazer family, which has controlled the club since 2005, began formally exploring a sale.

Adding together the cost of the stock purchase and the other capital for investment means that Sir Jim will be committing about £1.5bn on day one of his partial ownership of United.

The deal was reached in principle after months of negotiations with several potential buyers, including the Qatari businessman Sheikh Jassim bin Hamad al-Thani, who wanted to acquire full control of the club.

Reports have suggested that Ineos will take immediate control of the playing side of the club, where pressure is mounting on the men’s first team coach, Erik Ten Hag, amid a stuttering European campaign and the team’s latest Premier League defeat at the weekend.

Sir Jim is understood to be committed to investing additional sums in future, although it is unclear whether these will be publicly discussed at the time of the stake purchase.

Several other key questions remain about United’s future ownership, including whether Sir Jim will ultimately seek overall control of the club.

Some United fans have expressed disquiet at the prospect of Sir Jim buying a minority stake given that it paves the way for the Glazers’ continued presence at Old Trafford.

The family, who paid just under £800m to buy the club in 2005, has remained inscrutable throughout the process and has said nothing of substance to the NYSE since the process of engaging with prospective buyers kicked off last November.

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Earlier iterations of Sir Jim’s offers for the club, which focused on gaining outright control, included put-and-call arrangements that would become exercisable three years after a takeover to enable him to buy out the remainder of the club’s shares.

The Monaco-based billionaire, who also owns the Ligue 1 side Nice, pitched a restructured deal in October in an attempt to unblock the ongoing impasse over United’s future.

In addition to the competing bids from Sir Jim and Sheikh Jassim, the Glazers received several credible offers for minority stakes or financing to fund investment in the club.

Part of the Glazers’ justification for attaching such a huge valuation to the club resides in the possibility of it gaining greater control in future of its lucrative broadcast rights, alongside a belief that arguably the world’s most famous sports brand can be commercially exploited more effectively.

The Glazers’ tenure has been dogged by controversy and protests, with the absence of a Premier League title since Sir Alex Ferguson’s retirement as manager in 2013 fuelling fans’ anger at the debt-fuelled nature of their takeover.

Fury at its proposed participation in the ill-fated European Super League project in 2021 crystallised supporters’ desire for new owners to replace the Glazers.

Confirming the launch of the strategic review last November, Avram and Joel Glazer said: “The strength of Manchester United rests on the passion and loyalty of our global community of 1.1bn fans and followers.

“We will evaluate all options to ensure that we best serve our fans and that Manchester United maximizes the significant growth opportunities available to the club today and in the future.”

The Glazers listed a minority stake in the company in New York in 2012.

Ineos and Manchester United both declined to comment.

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