Manchester United Plc (NYSE:MANU) fans now know a bit more about who may be buying the Premier League club with three potential outcomes emerging to date. Each will likely have a significantly different impact on shareholders.
Raine Group, the investment bank conducting the sales process, set last Friday 10pm as a soft deadline for proposals to be put forward.
Sheikh Jassim bin Hamad Al Thani and Sir Jim Ratcliffe have both officially put their names forward, while US hedge fund Elliot Management reportedly said it will help finance any takeover, opening the door for the Glazers to remain in control via refinancing.
So what does all this mean for Manchester United’s New York listed shares?
Before we can answer that, it is first important to understand that not all Manchester United shares were created equally.
The Glazer family - comprising the six offspring of late Florida ‘real estate and strip-mall tycoon’ Malcolm Glazer – together own all of Manchester United’s B shares which retain almost all the group’s voting rights, whilst the New York listed stock are A shares (B shares have 10 votes per share, whilst A shares are one vote per share).
Altogether the Glazer family’s B shares represents around 69% of Manchester United’s share capital.
Since news broke that Manchester United was up for sale price of the New York listed A shares has double, priced today at US$26.75 per share to value the club at US$4.34bn.
What happens next for the share price depends largely who ends up with control of Manchester United.
Here’s what we know so far.
Qatar
Sheikh Jassim bin Hamad Al Thani confirmed his intention for a complete, 100% takeover of the club which means both classes of Manchester United shareholders would be bought, mostly likely at a premium valuation.
The Sheikh is the son of the former Prime Minister of Qatar and is currently chair of the Qatar Islamic Bank.
He claims to be acting as an independent investor, away from the state of Qatar and any state-backed funds and plans to buy Manchester United with his company the NINE TWO Foundation (purportedly monikered after the 'Class of 92' FA Youth Cup winning Manchester United team that famously featured the likes of David Beckham, Gary Neville, Paul Scholes, Ryan Giggs and Nicky Butt).
Although the state had expressed an interest in acquiring a Premier League club, the ownership of one would mean it would have to let go of PSG in order to pass muster with UEFA, given that the Qatar Sports Investment (QSI), a subsidiary of the Qatar Investment Authority (QIA), can't own more than one club in the same competitions.
Regulatory scrutiny may follow a successful bid coming out of Qatar in light of these rules.
Sir Jim Ratcliffe
INEOS founder Jim Ratcliffe said his bid would be majority ownership as opposed to a complete takeover.
Specifically, he is reportedly seeking to buy the Glazer family’s 69% stake in the club (the B shares) after nearly 20 years in charge of the club.
This would mean that the New York-listed A shares would remain in circulation, and, the lop-sided equity structure may remain.
Speculators buying into the shares are the price rocketed since November may end up in a pinch, if a cash offer for the A-class rump isn't forthcoming.
As Ratcliffe also owns a French club, OGC Nice, via INEOS so he is also expected to navigate around the UEFA rules against ownership of multiple clubs.
Glazer's hedge fund play
American hedge fund Elliot Management has form in football investment having previously owned AC Milan, and it is reportedly ready to back suitors interesting buying Manchester United.
Rather than buy the club itself, however, it is intending to finance third-party deals for the club.
This quickly created speculation and reports that Joel and Avram Glazer, the two siblings with direct involvement with the club, may seek to capitalise on the club's new premium valuation to raise sufficient funds to buy out the four other family members.
It would leave Glazer hands in on the wheel at United.
For fans, this is seen as the worst-case scenario. And for those left holding A shares, it wouldn't look much better.
It would, in theory, likely see no major changes to how the club is run, and would with great anticlimax quickly strip away the bid-premium from the New York listed stock.
Quickly, it would wipe away what's predicted to be the biggest sports takeover ever in history (at least until Liverpool's auction process resumes).
What's next?
Friday's so-called deadline was the first step in what could become a protracted sales process, in the meantime the Manchester United share price is likely to remain volatile.
The Raine Group's had hoped to provoke a bidding war between rival buyers, or, even better a full-blown auction.
It remains to be seen whether other bids were made prior to deadline and remain confidential, or whether further approaches may now follow the 'soft' deadline.
The world's eyes will be on any new reports in the coming days and weeks, for shareholder's the devil will be in the details.
Shares could move higher or lower depending on the details that emerge, but it's certain that not all outcomes would lead to a potential upside.