Proactive Investors - Manchester United Ltd (LON:0Z1Q) shares dropped 12% in Monday’s early premarket deals as holders of the football club’s New York listed subordinate minority shares conceded to reports that a full takeover is off, and, that INEOS boss Sir Jim Ratcliffe looks set to buy a 25% stake.
According to latest reports, the Ratcliffe proposal would see the INEOS chair pay more than $1.5 billion for a 25% stake valuing the football club at around $6 billion excluding its $600 million of net debt.
For the reds, devil will be the detail as Ratcliffe’s proposed minority stake acquisition proceeds.
Top of the agenda for fans and shareholders alike will be whether the 25% transaction is a steppingstone to a phased full takeover and whether Ratcliffe will have contracted options over future transactions with majority owners, the Florida-based Glazer family.
Attention will likely to turn to United’s financial position and balance sheet as the football club is believed to require an injection of funds and likely a debt refinancing.
The composition of any refinancing could also be decisive for who controls the financial reins of the club.
Prior offers that would’ve seen Ratcliffe acquire up to 69% of the club reportedly could have seen new debt housed under an INEOS holdings company rather than the Old Trafford club directly.
No formal announcements have yet been made by either Manchester United, the Glazer family, INEOS or Jim Ratcliffe. And deal terms are not publicly known at this time.
Media reports on Friday and over the weekend indicated that the Manchester United board would soon meet for talks over the proposed transactions.
Qatari businessman Sheikh Jassim bin Hamad al Thani has withdrawn from the process, according to most recent reports, after his offer to buy 100% of the business was not accepted by the Glazer shareholders.
In New York, Manchester United shares were down $2.40 or 12% in early premarket trading at $17.58 – down from Friday’s closing price of $19.74.
The listed shares traded up to nearly $27.00 per share earlier this year amidst takeover-driven market speculation.
At present, the listed shares have a tenth of the voting power compared to the class of shares held by Glazer family members.