Manchester United sells 25 percent ownership stake to Jim Ratcliffe

After a year of rumors, offers, final deadlines and final deadlines, the owners of Manchester United announced on Sunday that they had sold a minority stake in the team, English football’s most successful club, to British petrochemical billionaire Jim Ratcliffe.

The sale of the 25 percent stake in United, the former English and European champions, was confirmed by representatives of United and Mr Ratcliffe’s company INEOS. The deal capped a chaotic process that many fans of the team had hoped would end with something much more important: the club’s departure from the team’s current owners, the Florida-based Glazer family, which controls United since they acquired it through leverage. redemption in 2005.

Instead, the Glazers will remain the majority owners of the team, while netting a sum that values ​​Manchester United at around $5.5 billion, or more than five times the amount the Glazers paid to own the team nearly two decades ago to buy.

Ratcliffe, through INEOS, agreed to pay $33 per share for his 25 percent stake, a price that represents a premium of almost 70 percent to the current value of the team’s shares on the New York Stock Exchange.

The sales process began more than a year ago and started with an offhand comment from Elon Musk on social media that he wanted to buy the club. Musk later said his offer was a joke, but the Glazers apparently wanted to hear more.

United hired US-based mergers and acquisitions specialist Raine Group to manage a future sale after the company secured a record price, around $3 billion, for another English club, Chelsea. When the Glazers made it clear they were open to offers, bidders quickly lined up, including not only Mr Ratcliffe, but also a US investment fund and a Qatari businessman with ties to some of the Gulf country’s most influential figures. Their offers seemed to increase with each new media report.

The entire process took place against the backdrop of months of conflicting headlines, fan protests and swings in the club’s share price – all while the team, once a fixture at the top of the Premier League standings, struggled for consistency and wins . the field.

“It has been a process of putting the interests of the Glazer family ahead of the interests of the club,” said Duncan Drasdo, a United fan and CEO of the Manchester United Supporters’ Trust, a group that has protested against the interests of the club. ownership since the Glazers first arrived at Old Trafford.

Due to the nature of the original takeover, the Glazer family’s late patriarch, Malcolm, was burned in effigy, prompting the Premier League to belatedly establish rules so that such a transaction could not be repeated. The Glazer family took control after borrowing most of the cost of their £805 million (about $1 billion today) takeover on United’s previously debt-free balance sheet. In the 20 years since, the club has paid more than £1 billion in interest and other costs associated with the Glazer takeover, while debts have now also exceeded £1 billion.

The decision to even consider a partial sale was celebrated by the team’s huge fan base when it was announced in November 2022. By then, United had been without a Premier League title for almost a decade, a championship it last celebrated in 2013, and had been usurped as English football’s dominant club alongside city rivals Manchester City, thanks to the support of a member of the ruling family of the United Arab Emirates.

A similar opportunity for United arose when the businessman son of one of Qatar’s men, former Prime Minister Hamad bin Jassim bin Jaber Al Thani, announced his intention to buy the team. That offer was widely promoted on social media by fans, influencers and even former players, including Rio Ferdinand, a former captain, who caused a frenzy and a spike in United’s share price in June when he announced a sale to the Qatari group “was imminent”. .”

That turned out to be a false dawn. And it wasn’t the only one. Other headlines in the British news media, which covered the takeover in a manner more typical of the transactions of high-profile players in the transfer market, led to similar rises and falls in both hopes and the price of United shares.

The completion of the sale process will not yield the outcome many fans had hoped for: the Glazers’ sale of the team. Mr Ratcliffe will now control just 25 per cent of the club’s voting rights through a mix of the Glazers’ shares and some of the shares owned by other shareholders. As part of the deal, the Glazers will hand over day-to-day control of the club’s sporting activities to a management team put together by Mr Ratcliffe, but will retain control of United’s commercial operations and still hold the majority of board positions.

“I think the problem with it is that the fanbase feels divided,” Mr. Drasdo said. “It leaves a feeling of resentment and negativity that doesn’t help. A clean break would have been better.”

Fans will hope that the new era will bring a return to United’s winning ways, and a reversal of the failed succession planning that followed the retirement of legendary coach Alex Ferguson after he led the team to the last of the league’s 19 championships in 2013 . Since then, new coaches have come and gone, and huge sums of money have been spent on new recruits. But without a clear strategy, the club now finds itself with a bloated and underperforming squad, clinging to eighth place in the 20-team Premier League.

“It’s better than the status quo,” said Andy Green, a MUST board member and head of investments at Rockpool, a private equity firm. “Because they have proven themselves to be absolutely disgusting as owners of football clubs.”