Manchester United acquisition: Ratcliffe’s minority proposal fails to excite investors

Manchester United’s (NYSE: MANU) investors appear unimpressed with Sir Jim Ratcliffe’s suggestion of acquiring a mere 25% stake, proposing a co-ownership alongside the Glazers.

Conversely, sources indicate that Qatari businessman, Sheikh Jassim bin Jaber Al Thani, persists in his ambition for a complete takeover. His outstanding £5 billion offer, the most substantial to the Glazers, remains unanswered, as the Glazers reportedly seek a higher valuation.

Ratcliffe’s potential minority transaction echoes a recent move by Liverpool, Premier League contenders, who sold a minority interest to the American group, Liberty.

Based on UK reports, Ratcliffe’s INEOS is rumored to purchase a blend of Class A shares, traded on the New York Stock Exchange, and the dominant Class B shares. The latter, owned by the Glazers, carries a decisive 10:1 voting advantage over the public equity.

Such a transaction might alleviate the concerns of some listed share minority holders, who felt overlooked by Ratcliffe’s earlier offers. This strategy diverges significantly from Ratcliffe’s initial aspiration of securing a dominant 69% share, primarily from the Glazer siblings’ possession.

While specifics are scant in UK gossip columns, Manchester United remains silent on its current endeavours.

A minority stake agreement could potentially provide Ratcliffe a significant influence within the company, potentially thwarting other contenders if he aims to augment his stake later.

For the Glazers, this prospective agreement might offer them dominance over the Old Trafford team, simultaneously freeing up funds and establishing a novel, loftier share valuation benchmark.

Sky News suggests a £1.5 billion transaction for the 25% stake aligns with the Glazers’ £6 billion total club valuation.

The proposed deal wouldn’t inject capital into Manchester United if Ratcliffe did not purchase new equity. Instead, the transaction’s proceeds would benefit the Glazer family and listed shareowners.

In New York, early indicators suggest a modest 0.2% rise in Manchester United stock, placing its value at approximately £3 billion.

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