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Manchester United saga ends with US$1.3 billion Ratcliffe deal

Bloomberg
Bloomberg • 4 min read
Manchester United saga ends with US$1.3 billion Ratcliffe deal
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Billionaire Jim Ratcliffe has completed the purchase of a stake in Manchester United, defeating rival bids from petro-states and hedge funds and ending a bidding war marked by hype and rancour.

Through his chemical conglomerate Ineos Group, Ratcliffe will pay US$33 a share for a 25% stake in the club, valuing the club at about US$5.4 billion, falling below initial hopes of US$6 billion.

The decision to bring in Ratcliffe, one of Britain’s richest people, marks the end of a drawn-out sale process officially begun by the Glazer family just over a year ago. At times, the deal drew hype and speculation closer to the Premier League’s deadline day or the NFL draft than a billion-dollar deal in a public company. 

Bloomberg first reported that the Glazers would consider selling a minority stake in the team, and that Ratcliffe had emerged as the front-runner.

According to a statement on Sunday, Ratcliffe will acquire 25% of the Class B shares owned by the Glazer family and begin a tender offer for 25% of the listed Class A shares; Ratcliffe will invest US$300 million into the club and new investors will get two board seats.

For much of the past year, Ratcliffe battled a rival offer from Sheikh Jassim bin Hamad Al Thani, the third son of Qatar’s former prime minister, for outright control of the club. But neither bidder could match co-chairs Joel and Avram Glazer desire to cement Manchester United as the world’s most expensive sporting asset.

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The Qatari group had made it clear they would not overpay for the club. Before the bidding war began, Sheikh Hamad bin Jassim bin Jaber Al Thani, Qatar’s former prime minister and Sheikh Jassim’s father, told Bloomberg that he wasn’t a fan of football investments in the Premier League.

In October, the Qatari camp withdrew its offer, claimed to be around the £5 billion mark, but which likely included debt and a host of funding extras such as redevelopment of the training ground. The Qatari’s relationship with Raine Group — the investment bank in charge of the sale — had deteriorated, according to people familiar with the matter. 

It remains to be seen how Ratcliffe, a self-made billionaire, will manage the club alongside Joel and Avram Glazer, who inherited the team from their father Malcolm, who made a fortune from a range of investments including real estate and broadcasting.

See also: Manchester United shareholders are as unhappy as its fans

The victory also cements Ratcliffe’s plans to build out a personal sporting empire after failing in a late attempt to buy Chelsea FC last year. Via his chemical giant Ineos, Ratcliffe also owns France’s Ligue 1 OGC Nice, the cycling group formerly known as Team Sky, and a stake in the Mercedes-AMG Petronas Formula One team.

Jim Ratcliffe’s Sports Bets: Before and After | Most teams performed worse in competitions after Ineos investment

The decision from the Glazers to keep hold of the club will almost certainly anger fans, who have protested for years to oust the unpopular owners. 

Malcolm Glazer bought Manchester United in a 2005 leveraged buyout that saddled it with massive debts, and the family has faced distrust from hardcore supporters ever since. While this was mitigated in the early years of their ownership as the team continued to win trophies under Alex Ferguson, resentment has grown steadily after the renowned coach’s retirement in 2013. 

The family hired investment bank Raine Group, who were also in-charge of the sale of Chelsea FC, to drum up interest for the one dominant team that has floundered in recent years. 

But while Chelsea saw a fierce fight to win the deal, Sheikh Jassim and Ratcliffe were the only two significant parties to publicly declare an interest in buying Man United, after rising interest rates combined with what many saw as an excessive valuation put many bidders off. 

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A number of financial groups, including Elliott Associates LP and Carlyle Group Inc., also put bids in, according to people familiar with the situation, but only for minority stakes.

At points, the bidding descended into farce. In late March, just before the second-round deadline for offers, a flurry of contradictory statements and reports emerged regarding offers being placed, withdrawn, or not even made, leading to Ratcliffe and Jassim being given extra time to bid.

Attention will now turn to how Ratcliffe will turn around a floundering club, suffering from years of under-performance and a dilapidated stadium. 

“Our shared ambition is clear: we all want to see Manchester United back where we belong,” said Ratcliffe in a statement, “at the very top of English, European and world football.”

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