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Manchester United on the market: A comprehensive analysis of the ongoing story

In November, United’s owners, the Glazer family, startled the football and business worlds by revealing that they were looking for “strategic alternatives,” including a full sale of the club.

The Americans are claimed to have set a mid-February deadline for takeover bids and are hoping to complete the process by the end of March.

The Glazers are rumored to be seeking a £6 billion sale price, which would be a global record for a sports franchise. On the New York Stock Exchange, the club is valued at £3.2 billion.

At least four serious bidders have surfaced with formal bids over £5 billion anticipated to entice the Glazers into a full sale. In recent months, there have been rumors of interest from European consortiums, American venture capitalists, and oil-rich Middle Eastern funders.

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Sir Jim Ratcliffe’s declared desire to purchase Manchester United

Ratcliffe’s business, Ineos, has publicly stated its desire to participate in the bidding process. Ratcliffe is a lifetime United supporter, and Ineos has a one-third ownership stake in the Mercedes F1 team as well as Ligue 1 club Nice.

Sir Jim Ratcliffe will compete for Manchester United alongside Qatari investors and US consortiums, having obtained funding from two of Wall Street’s largest lenders. He has provided the clearest hint yet that he has secured finance, having worked with two powerful investment banks for several weeks.

Goldman Sachs and JPMorgan Chase & Co. are willing to support his bid with bonds and loans in excess of the value of United’s existing debt of £659 million. The British billionaire, on the other hand, may be obliged to accept excessive interest payments on the debt funding given.

Since central banks raised interest rates to combat inflation, investment bankers on both sides of the Atlantic have seen a drop in deal making.

Ratcliffe has requested further financing

The deadline of February 17 permits the club to keep to its guidelines and finalize a deal before the end of the current season. With that in mind, alternative rates based on Champions League qualifying may be considered. Formal bids will be accepted for both entire buyouts and minority interests.

Ratcliffe has a personal wealth of £6.33 billion, but United is unsure whether he is willing to reach the Glazers’ asking price after first canceling negotiations with Chelsea last year. Sources now reveal that he has sought further financing in order to put together an offer that dwarfs any of his past investments in sports.

The major banks on Wall Street have gotten more involved in football, owing primarily to the game’s popularity in the United States.

JPMorgan previously underwrote plans for a European Super League breakaway and represented the Glazers in the sale of certain United shares. Separately, Goldman Sachs and Morgan Stanley are negotiating a prospective sale of Liverpool FC with the club’s owners.

Qatar’s interest is ‘concrete’

Investors linked to Qatar’s royal family have been widely reported to be considering a bid for the Premier League powerhouse. According to the reports, the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani, is a key figure in the project.

When queried about investment by an American broadcaster last month, QIA CEO Mansoor bin Ebrahim Al-Mahmoud refused to rule out a United agreement.

The Qatar royal family sought to buy United in 2011, but it was claimed that they did not reach the Glazers’ asking price of £1.8 billion at the time. There are now supposedly additional barriers in place that might thwart a successful takeover.

There is concrete interest from a Qatari group, and they are studying the circumstances of a Manchester United transaction with the Glazer family, using intermediaries and legal specialists to handle the process. Furthermore, the Raine Group is said to have approached Qatari investors to see if they were interested in purchasing United.

While the Qatari group has expressed interest in the club, they would not overpay for it. While the Qatar Sports Investments (QSi) ownership of PSG is also considered a possible stumbling block in any discussions.

Qatar’s Manchester United proposal may modify UEFA rules

Qatar may need to petition UEFA to amend its ownership laws in order to finalize the acquisition. Current rules say that clubs managed, either indirectly or directly, by the same organization cannot compete in the same competition.

The Emir presently owns PSG through Qatar Sports Investments (QSi), which became sole proprietors of the club in 2012; if Qatar acquired Manchester United, the French giants would be unable to compete in the Champions League or any other UEFA-run competition with United.

If the law is not changed, the Qatari owners would most likely have to pick between Manchester United and Paris Saint-Germain to compete in the top continental league.

It is uncertain if UEFA would agree to such a rule change at this time, while it is stated that those behind a Qatari bid are ‘aware’ of the present rules.  The Emir is also said to value United at less than the Glazers’ asking price, which might be another sticking point in any potential deal.

The Saudis’ ‘confirmed’ interest in United

There have also been rumors of possible Saudi investors bidding and gaining access to United’s finances. In December, the Saudi government said officially that it would consider private sector proposals from the kingdom for United and Liverpool.

Given their participation in Newcastle United, it is unclear how any hypothetical Saudi offer for United would function in practice, similar to the Qatari/PSG issue.

The Saudis’ interest in United is not new. It is thought that the country has previously considered a full takeover of Old Trafford.

According to sources, the Glazers were only interested in selling a 20% ownership in the club on those occasions; therefore, the matter never progressed. United has previously collaborated with Saudi Telecom, the country’s largest telecoms firm.

In 2017, they also committed to a strategic relationship in which United will assist Saudi Arabia’s General Sports Authority in developing its football business as part of the Saudi Vision 2030, which aims to diversify the Saudi economy and boost public sectors.

 Multiple U.S. Consortiums also join the fray

According to some sources, four groups will make ‘serious’ bids for United, while others claim five. Among them, financier-led consortiums in the United States are likely to show a lot of interest. That being said, as interested parties examine United’s accounts, these American suitors are holding their cards close to their chest.

The Ricketts family, owners of the Chicago Cubs MLB team and one of the final four bidders for Chelsea before Todd Boehly and his associates won the competition, is not believed to be in the running.

Sixth Street, a San Francisco-based investment group with ties to Barcelona and Real Madrid, was said to be interested in acquiring a minority stake in United. But they were pleased to deny it while everyone else on the other side of the Atlantic remained silent.

Meanwhile, in the United States, new offers have emerged from companies that lost out to Todd Boehly and Clearlake in the bid to acquire Chelsea last year.

It is claimed that “several” US financier-led consortiums have confidentially assured that they will bid. However, given the promises of confidentiality as part of the bidding process, few are prepared to be named.

Should a takeover materialize, it would bring an end to the Glazers’ nearly 18-year rule, which began in May 2005 when Malcolm Glazer acquired a majority stake and ultimately entire control of the club.

A valuation of £5 billion or more has been characterized as exorbitant by the likes of Sir Martin Broughton, but the participation of the Middle East may play a crucial role in determining a price cap.

Manchester United CEO Richard Arnold recently stated that any new owners in the club will be pushed to engage closely with supporters and expressed optimism that a potential complete or partial sale would be a “good” move forward. The team hopes to close a deal by the end of April, or within the first quarter.

Even though Sir Jim Ratcliffe and the private Qatari investors are the early frontrunners, Old Trafford’s future is still up in the air.