Man Utd shares hit three-year high as US billionaire targets takeover

SHARES in Manchester United hit a three-year high yesterday after it emerged that US billionaire Malcolm Glazer was considering a bid for the club.

Mr Glazer, who upped his stake in United to 16.31% on Thursday, has hired the investment bank Commerzbank to begin preparatory work on a possible bid. The bank would not comment yesterday.

The 75-year-old is the second-largest shareholder in Manchester United after Irish racing tycoons John Magnier and JP McManus, who own 28.89%.

According to analysts, a bid for the club would have to be pitched at around £3.05, (€4.50) valuing Manchester United at around stg£800 million and netting stg£168 million for the Irish pair and a profit of stg£70m on what they originally invested in the club. They have also increased their stake this week but are believed to be against a full takeover. They are considering looking for two or three seats on the board of directors, which would give them serious influence in how United is run.

However, the move by Mr Glazer may cause problems for Cubic Expression, who hold the shares owned by the two, as it may be forced into some kind of action; it could either act in unison with Mr Glazer and thereby join any bid, sell out to him, or block any attempts he makes to buy the club. Given the size of their stake it would be impossible to take over United without their support.

United shares closed up 4.6% at 279p on the London Stock Exchange. They have more than doubled since beginning of 2003, thanks to the takeover speculation. They are still trading below their time high of stg£4.65 when BSkyB tried to take over the club.

The interest in Manchester United shares has met with opposition from its devoted fans. They are concerned that Cubic are using the stake as leverage in the row with manager Alex Ferguson over the earnings from breeding rights to racehorse Rock of Gibraltar.

Manchester United is the world's largest football club and has some 50 million fans worldwide. It is not surprising that the Premiership champions have attracted the attention of major investors who believe that its brand could earn huge profits if it were fully exploited. Its profits of €57m last year are still quite small despite the size of the fan base.

Other well-known investors include financier Dermot Desmond, who is the co-owner of the Sandy Lane resort in Barbados with Mr Mangier and Mr McManus, and Harry Dobson, a Scottish millionaire who was active in the Irish property market in the 1980s.