- Six Glazer siblings considering structure that would see them sell down their holdings, according to the FT
- Ratcliffe would buy the remainder of shares in coming years through derivatives contracts
- Bid’s structure means Ineos founder can part with less capital up front and obtain majority control
Nearly seven months on from United’s American owners confirming they were exploring ‘strategic alternatives’ for the club, Ratcliffe and Qatari banker Sheikh Jassim Bin Hamad Al Thani have emerged as the only serious bidders in a protracted process. While Sheikh Jassim wants to acquire all of the Glazer family’s shares in the Red Devils, Ratcliffe’s bid is more complicated because he is just seeking majority control.
United have a listing on the New York Stock Exchange but the Glazers control 95 per cent of the voting courtesy of a special class of B shares. The publicly traded A shares, meanwhile, are largely held by minority shareholders and have minimal voting power.
The FT reports that Ratcliffe, a boyhood United fan, plans to acquire at least enough class B shares to secure control of the club as part of an offer that is not expected to extend to common shareholders.
There has been speculation that the Glazers could remain at Old Trafford in some capacity. ESPN reported in April that Joel and Avram Glazer were hopeful of bringing in external investment to continue as owners. Their siblings and fellow directors Kevin, Bryan and Edward Glazer and Darcie Glazer Kassewitz would offload their stakes in the club in such a scenario.
The potential sale of United has been complicated by a lack of cohesion among the Glazer siblings. However, according to the FT, the family is now focused on a structure that would allow them to sell down their holdings, enabling Ratcliffe to take control.
The terms of Ratcliffe’s deal, the FT says, would see the British and billionaire chemical giant Ineos buy the remainder of the Glazers’ shares in the coming years through derivatives contracts.
The FT adds that the structure of Ratcliffe’s bid means that he can part with less capital up front, obtain majority control and invest in the club.
A potential stumbling block to Ratcliffe’s plan to buy the B shares is that United stock exchange filings say the B shares are “automatically and immediately” converted into class A shares on transfer from the Glazers “to a person or entity that is not an affiliate of the holder”.
According to the FT, one possible solution would be for the Glazers to vote through changes that would allow the B shares to pass over to Ratcliffe without turning into A shares.
Ratcliffe and Ineos are said to have remained flexible on the structuring of a deal for United in order to get the takeover across the line. The bid is expected to value the club at more than UK£5 billion (US$6.2 billion), including debt. Still, no agreement is guaranteed and the structure could change.
Fans, already critical of the Glazers’ ownership, have grown further frustrated over the lack of clarity on the team’s ownership. Those feelings will intensify given no deal is expected imminently.
With the season now over, the Glazers will be under extra pressure to shed light on their plans for United. Further delays would only incense supporters and potentially hamper the club’s activity in the transfer market.
At this advanced stage, it is unlikely more bidders will come forward. According to the FT, Ratcliffe is regarded as a more serious contender than Sheikh Jassim, but there are several issues that need to be resolved. Unless there’s a swift breakthrough, don’t hold your breath over a change in ownership.