As Liverpool FC owners Fenway Sports Group agrees to sell a minority stake sale, the glaring question rival stakeholders must be asking is what does this mean for Manchester United Plc (NYSE:MANU) and its apparently dwindling prospects of a takeover?
The Merseyside club at one stage were eying a total sale, but opted to sell only a small portion of the business.
FSG confirmed the deal but not precise financial details. It was reported by media to be between US$100 million and US$200 million (£82-164 million).
The American group, which acquired Liverpool 12 years ago for £300 million, held talks with several potential investors.
Bringing in Dynasty does not affect the operation of the club or represent the first step towards a sale, though the pair said that in the long term they will "explore further growth opportunities"
In New York, Manchester United shares were down nearly 2% in Thursday morning’s trade valuing the Red Devils at close to $3.2 billion.
United last year stole scouse thunder, when the Glazer family effectively put a hand up to say "we're for sale too" after Liverpool launched its process.
Perhaps, the actions at Liverpool provide further foreshadowing.
Indeed, the Glazer family, Manchester United’s controlling majority shareholders may look down the M62 with envy at Liverpool’s deal making.
Liverpool has, according to reports, raised US$100-$200 million of capital through a minority stake sale, to Dynasty which intends to have a ‘small and passive’ involvement in the clubs affairs.
FSG plans to pay off some debt and boost the balance sheet as it continues to redevelop its Anfield stadium.
The pricing of the minority stake will presumably, based on recent trends, help ratchet the book value of the Merseyside club.
Liverpool’s worth was recently estimated at around $5.3 billion, according to a Forbes study of football economics in May – a valuation that would be underpinned, for example, if Dynasty has indeed paid up to $200 million for say 4% of the club.
Those are the sort of deal economics that may be giving the Glazer family pause for thought.
The Glazers, who reportedly see the United as being worth much as $8-10 billion and may be happy to wait a few more years before cashing out, could seek a similar sort of passive transaction as seen today in Liverpool.
Selling a much smaller, minority portion of the club could be a release valve to ease financial pressure currently on the Glazer-owned operation and at the same time, if a deal is priced cannily, could see the American owners set a new, higher benchmark valuation for the club.
Recent reports, earlier this month, claimed United’s Florida-based owners are thinking about walking away from the takeover offers pitched by Qatar based businessman Shiekh Jassim bin Hamad Al Thani and INEOS owner Sir Jim Ratcliffe.
Sheikh Jassim’s offer is to buy 100% of the business and reportedly values all of United at around £5 billion, whereas Sir Jim seeks to buy a controlling position.
The Ratcliffe offer would be expected to see INEOS buying shares held by the members of the Glazer family and some of them may retain minority interests into a new ownership structure. Such a scenario would leave United’s listed shares remain in place.
FSG in early November launched a process to sell some, or potentially all, of the club and hired investment bankers at Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) to assist the process.
Manchester United, about two weeks later, confirmed it was undertaking a similar process using the Raine Group, the New York based merchant bank that successfully sold Chelsea to a consortium of American investors in May 2022.
Raine, which also helped broker the WWE sale to the owners of the UFC, in July, raised $760 million into a new fund targeting investments in ‘growth stage companies’ in the sports and entertainment sectors.
Whilst serious takeover offers came from two potential buyers, the pool of minority investors in Manchester United is likely to be substantially larger.
So, not for the first time in recent years, the followers of Manchester United may be looking on wistfully at what’s happening on Merseyside.