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What Sir Jim Ratcliffe’s 25% stake bid could mean for Man Utd

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On the 22nd November 2022, Manchester United owners the Glazer family, publicly announced they were ‘exploring strategic alternatives,’ in a potential sale or additional investment into the club.

Just under 11 months on and this process is finally drawing to a close.

With Qatar banker Sheikh Jassim dropping out of the race, this leaves Ratcliffe as the frontrunner and likely the new investor in the club.

Despite his initial desire to take 69% of the club, which specifically equated to all the six Glazer siblings shares combined, Ratcliffe’s newly proposed 25% deal worth around £1.3bn, is the one which has finally won over the stubborn owners.

Such an offer wouldn’t make him the majority shareholder, but rather the beginning of a staged takeover in the coming years.

How Ineos’ bid bettered Jassim’s offer

The sales process was nothing short of a mess, with neither Ineos nor Jassim able to convince all six Glazer siblings to sell completely.

Both sides wouldn’t want to alienate the Glazers early into the sale, but Qatar’s opening statement about bringing United back to the glory days, definitely did that.

Daily Mail reporter Mike Keegan said: “To say that comment did not go down well with the Glazers would be an understatement.

An offer many thought would render their purchase of the club a formality started on the wrong foot and, as the months dragged on, failed to recover.”

Whereas, when discussing first impressions, Keegan said this: “The stops were pulled out when United hosted both parties at Old Trafford and their Carrington training complex in March. Ratcliffe and his people impressed. They asked the right questions and were said to be straightforward and transparent about what they could and could not do.”

Therefore, with Jassim initially annoying the Glazers and Ratcliffe giving off a strong first impression, this gave the Englishman a slight edge.

Ultimately though, friendliness would not define this race, money would.

With United’s market capitalisation sitting at just 2.92 billion dollars, Qatar didn’t feel United was worth the Glazer’s £6bn asking price.

Jassim was offering around £5bn but with the intention of investing future billions into the stadium, the team and local community.

Whereas, Ineos were also offering similar valuation, speaking of the intention to invest into the stadium and Carrington training ground, but not to the same extent.

With neither Ratcliffe’s bid nor Jassim’s bid reaching the Glazer’s asking price, something had to change and Ineos were the ones to make the move.

After a few rounds of bidding, Ratcliffe revised his offer to keep Joel and Avram Glazer as important shareholders, rather than buying out all their shares as originally planned.

Sky News said: “The executive co-chairmen, Avram and Joel Glazer, are said to be more reluctant to sell than their siblings, prompting Ineos to structure an offer which would allow them to remain as influential shareholders.”

This in turn caused issues as it led some of the other siblings to feel that Joel and Avram got the better deal if they chose the English bidder, as they got to keep their shares and sell them on for more in years to come, whereas the other four couldn’t.

Additionally, another issue in the matter was the class A shares.

With Jassim’s offer to buy 100% of the club, this caused no legal issues, but with Ratcliffe’s offer to buy out most of the class B shares, this caused legality issues as the other shareholders in United, whom own class A shares, felt they weren’t getting a fair slice.

This comes down to internal issues, as class B shares have 10x more voting rights than class A shares and only the siblings could own class B shares.

Ultimately, this caused even more delays.

With Qatar not meeting the asking price, and Ratcliffe’s deal enticing but plagued with legality issues and dispute amongst the siblings, the takeover hit a standstill.

Ultimately, this lack of movement remained for months.

But what changed it?

It was Ineos’ flexibility to propose the 25% deal which kept the Glazer’s as majority shareholders, which finally turned the tide in the sale process.

This is because it appealed to Joel and Avram who could continue as influential shareholders, whilst satisfying the other siblings who didn’t want to be hard done by in the sale and avoiding legality issues as the 25% would be bought equally from the Glazer’s shares and those on the New York stock exchange.

The 25% equated to £1.4bn which valued United at around £5.6bn, which is higher than Jassim’s offer and thus was financially more incentivising to.

Therefore, Ratcliffe’s revised 25% offer was finally acceptable and Sheikh Jassim later pulled out after his bid failed.

However, it remains to be seen how and what implications Ratcliffe’s future desire to gradually buyout the Glazers will have in his attempt to become majority shareholder.

Ultimately, there is still a necessary board meeting to vote on Ratcliffe’s bid and whether to accept the offer before going through the various processes for it to become official.

Despite this, Ratcliffe is ‘confident’ this deal will be accepted and thus Ineos is incredibly likely to become a new 25% shareholder in United.

How does this affect the Sporting side of the club?

This is the question everyone wants answered.

Through sporting control, Ratcliffe will likely look to restructure this department by removing Richard Arnold who is chief executive and John Murtough who is the footballing director. In turn we could see big names like Paul Mitchell or Jean Claude Blanc brought in to improve the efficiency at the club.

Such changes could massively revolutionise the running of United as inefficiency has been a major factor which has plagued United in the last decade.

However, according to the financial times, the proposed deal with Ratcliffe taking sporting control would have Sir David Brailsford and Joel Glazer sitting on the committee overseeing footballing decisions.

This will be incredibly concerning for fans, as the major incentive to this deal was taking sporting influence away from Joel and Avram Glazer in particular, but this seems to avoid achieving this and so creates further queries and doubts around the potential deal.

But what about the Glazers?

Since Ratcliffe’s originally revised deal to keep Joel and Avram at the club, this has been a huge point of concern for fans who want nothing more than to see the American owners out of the club completely.

Thus, with this deal keeping the Glazers as majority shareholders, fans will be even more concerned and it will raise questions about how you could possibly run the sporting side of the club if their isn’t the financial backing.

This is something which only time will tell, but having consistently used the club for financial gain, many fans will be doubtful over this new deal and how it’ll change much with the Glazers still likely to be limiting the budget and financial capabilities of the club, which are pivotal to running an effective football team.

What happens to the debt and where does the £1.4bn go

With the Glazer’s leveraged buyout placing the club in £500m of debt in 2005, this is one of the main criticisms of the Americans and their ownership, thus, fans will be hoping that this debt could be eradicated by the takeover.

However, as the deal still leaves the Glazer’s with majority control, it could likely just go to funding them further. This would further aggravate fans as Old Trafford and various other facilities need around £2bn worth of investment in it.

Despite this, there is a willingness from Ineos to begin revolutionising Old Trafford and expanding the capacity to 90,000 having set funds aside already.

But, Ineos have also suggested that improving the team is a bigger priority than investing into the stadium.

Therefore, fans will be interested to see where Ineos put the most time and resources into.

Another major concern with the Ratcliffe bid is the financing of this.

In February it was revealed that Ineos had hired Goldman Sachs and JP Morgan who are wall street firms that would help Ratcliffe in his bid. This would likely involve financing from these firms.

Whilst this may seem understandable to many, others may have uncomfortable Deja vu with the club being financed by debt.

However, in February it was also revealed that any debt acquired would be backed onto Ineos rather than onto United like the Glazers did.

Therefore, it has elements of concern due to the additional debt and questions over Ineos’ financial strength, but it will be relieving for fans that the debt won’t go onto the club.

What is United’s supporter groups stances?

Manchester United Supporters Trust (MUST) :

“It would be wildly optimistic to think Glazers are acting in the interests of supporters or are making ownership decisions which don’t centre on their own priorities”.

“We call upon all parties to put Man Utd interests before their own interests”. “If the reports are true regarding INEOS obtaining a 25% stake in our club there are a number of questions which need clarity before supporters can make any judgement on its merits.”

The 1958:

“FULL SALE ONLY is what we stand for. The removal of the Glazers 69% shareholding.”

When will Ratcliffe’s bid be completed?

Due to the complex nature of this sales process and with £1.4bn being paid, it will take time.

Fans will be hoping for it to be completed before the January transfer window, in the hope Ratcliffe can have some influence over the transfer business.

However, Mike Keegan said: “Sir Jim Ratcliffe’s deal to take a 25% stake in Manchester United may not be completed in time for the opening of the January transfer window. Lawyers are continuing to work on the finer details of what is a complex agreement, and insiders have warned that a final agreement could take ‘weeks.”