Sir Jim Ratcliffe is hoping to receive the green light for a minor investment in Manchester United within the next few days after his sole rival bidder pulled out.
British Chemicals billionaire Ratcliffe has explored various investment options ever since the Glazer family listed the club for sale nearly a year ago.
Two people with knowledge of the situation say that his most recent offer was for 25% of the club. However, the Ineos founder views this as a possible first step to gaining full control in the future. The board of United could approve his proposal in the next few days, ahead of the club’s next earnings report. However, the sources cautioned that there was no guarantee.
Ratcliffe has valued United, owned by the Glazers, at over £5bn. Ineos declined to comment.
United’s only competitor was Sheikh Jassim Bin Hamad al Thani, son of Qatar’s richest man, who wanted to purchase 100% of the company.
According to a source close to the bid, after a final round with the Glazers who purchased United through a leveraged purchase in 2005, Sheikh Jassim pulled out of his bid on Saturday. A person close to the bid said that the Glazers set an “extraordinary” value for United, which is listed publicly on the New York Stock Exchange.
Sheikh Jassim offered to purchase the club without borrowing money. His father, who was Qatar’s former prime minister and director of its sovereign fund, is a descendant of Sheikh Jassim . He also promised to invest both in the playing team and the club’s infrastructure. Old Trafford is the home ground of United and its training centre. Both are in need expensive upgrades.
The Glazers announced almost a year ago that they would be considering a number of strategic options, including the sale of the club. The advisers of the family have also had discussions with institutional investors including US private equity firms to explore alternative ways of raising capital.
People close to the bidders have criticized Raine’s protracted sale, which has been handled by them. People close to the situation highlighted that the control of the club was divided between six siblings who might not always agree.
The Glazers began seeking offers just a few months after US investors Clearlake Capital, Todd Boehly and Todd Boehly purchased London rivals Chelsea FC at a price of £2.5bn. This is still the record-breaking amount for transferring a football team outright. This price fueled hopes that United, a club with larger revenues and a broader global following, could command a much higher sum.
People close to United and the Glazers have been doubting the possibility of a Qatari bid being successful for months now, pointing out Ratcliffe’s willingness to be flexible in terms of deal structure.
United’s New York listed shares have fallen more than 12 percent this year. This puts the club’s equity around $3.2 billion. Both bidders made offers that valued the club much higher.
Ratcliffe is a long-time United fan and made an early pitch to bring the club back to its roots. In his initial offer, Ratcliffe focused only on purchasing the Glazer family stake. This could have caused problems with the club’s minor shareholders.
Since the summer, Ratcliffe’s team has changed their strategy to pursue a minor stake. This could include buying shares both from the Glazers as well as other shareholders.
After the Chelsea takeover, US owners of Liverpool FC also looked into a possible sale. Fenway Sports Group eventually decided last month to sell a tiny stake in the club, to Dynasty.