Man Utd shares up 5% over bid

SHARES in Manchester United gained just over 5% yesterday after the world’s biggest football club confirmed it has received a takeover approach.

Although the short statement from the club did not name the bidder, it is reported to be its second biggest shareholder, Malcolm Glazer, the US businessman.

The news sent shares in United up 13p to 271p on the London stock exchange at one stage yesterday.

While the company cautioned that the bid was at a preliminary stage and came with a number of preconditions, analysts expect Mr Glazer to succeed if he can get the backing of Irishmen John Magnier and JP McManus, the largest shareholders with a 29% stake.

The Irish pair have maintained they are long-term investors in the club, but a bid pitched at around 300p a share could tempt them to sell out.

Many pundits had expected them to launch their own raid on the club after moving their stake to 29%, just shy of the 30% threshold that would have forced them to make mandatory offer.

However, they will still be critical of any takeover of the club. If they decide to exit, it will leave the pair sitting on profits probably in excess of some £100 million.

One of the issues which Mr Glazer the owner of the Tampa Bay Buccaneers NFL team in the US will have to work out with his financial advisers is how to fund the takeover.

At 300p a share, he would have to stump up more than £700 million to acquire the club outright. Though extremely wealthy Forbes magazine estimates his wealth at less than £500m most of it is tied up in the Buccaneers.

NFL rules means he cannot mortgage the team to obtain a loan, so he will have to look at United's existing assets or future revenues, such as gate receipts and using these as security for borrowing.

This is unlikely to go down well with fans who want more money to be pumped into the club to buy players.

"We very much hope the board will come out very strongly and say a bid of this nature is beyond taken seriously," said Oliver Houston, a spokesman for Shareholders United, a group representing ordinary fans, who own nearly 20% of the club.

"Malcolm Glazer is by no means a sugar daddy. He hasn't even got the finances to spend new money on the shares, let alone on players."

Mr Glazer's swoop on the club comes at a time when its performance on and off the pitch has been less than stellar. It faces a struggle to regain the Premiership crown and predicts a fall in broadcasting revenues.

It is expected to be some weeks before a full offer emerges for the club.

Additional reporting by Reuters