Man Utd shares rise after analyst assesses valuations based on offers for Chelsea

Mon, 21 Mar, 2022 - 18:00

Joe Easton

Manchester United shares jumped yesterday after Deutsche Bank said bids for rival Chelsea highlight upside for the valuation of the Manchester club.

“We view Man U as more valuable than Chelsea”, analyst Connor Murphy wrote in a note to clients, and that Manchester United have outperformed Chelsea on a revenue and operating profit basis over the past three years. The shares rose as much as 6.7% in New York trade.

Mr Murphy noted that reported bids for Chelsea range from over £2bn (€2.4bn) to £3.5bn, while Manchester United’s so-called enterprise value is currently £2.1bn.

"In a theoretical sale, we would argue that Man U should be sold for more than Chelsea”, said Mr Murphy, adding that the bank has no view regarding whether the Florida-based Glazer family would sell the club any time soon. He upgraded his rating to buy from hold.

Deutsche Bank’s comments follow reports of several bidders chasing Chelsea after owner Roman Abramovich put the team up for sale following Russia’s invasion of Ukraine and subsequent sanctions on the billionaire.

An offer from Centricus Asset Management values Chelsea at more than £3bn, including commitments for further investment, according to a source.

After a summer boost from a deal to re-sign superstar Cristiano Ronaldo, Manchester United shares have underperformed as the Glazer family offloaded shares and its players faltered on the pitch. The team crashed out of the lucrative UEFA Champions League last week.

Still, the club’s brand appeal remains strong, despite the team’s stumbles, according to Deutsche Bank, which highlighted its 200 million social media followers and ability to monetise its fanbase through broadcasting rights, sponsorships and merchandising.