Who will win the race to buy Manchester United?

The ‘soft’ deadline for submitting bids for Manchester United Football Club has now passed, with three parties making their intentions clear as the Glazer family looks to sell its controlling stake.

As Sheikh Jassim bin Hamad Al Thani, Sir Jim Ratcliffe and United States hedge fund Elliott Management battle to acquire control, Dr Naaguesh Appadu, Senior Research Fellow at Bayes Business School (formerly Cass) – who teaches an M&A case study about the 2005 takeover of Manchester United by the Glazer family – explains the key differences and motivations between each bid.

“The Premier League is the most watched league in the world, with a huge pull of supporters, sponsors and commercial opportunities,” Dr Appadu said.

“The lure of owning a club in England is very strong, but recent activity at clubs like Newcastle United, and Chelsea who spent a lot of money on players in January, makes the challenge to compete even greater and may deter smaller investors.”

Sheikh Jassim bin Hamad Al Thani, Chairman, Qatar Islamic Bank (QIB)

Sheikh Jassim bin Hamad Al Thani is a member of the Qatari Royal Family and Chairman of the Qatar Islamic Bank.

“By many accounts, Sheikh Jassim bin Hamad Al Thani is a lifelong Manchester United supporter and appears to be fronting a bid via the investment vehicle Nine Two Foundation,” Dr Appadu said.

“With a reported estimated wealth of $1.3 billion, his bid is for a 100 per cent stake in the club with promises to invest in the training ground, playing squad and local communities, and to wipe all debt accumulated by the current ownership.”

On the surface, this should sit very well with Manchester United fans. However, as Dr Appadu explained, there are major moral caveats around Sheikh Jassim’s bid.

“The Qatar Investment Authority (QIA), the state’s sovereign wealth fund, retains a 17.17 per cent stake in QIB. Furthermore, Sheikh Jassim is a member of the Qatari royal family.

“As seen with Newcastle United’s takeover by the state-backed Saudi Investment Group (SIG), this casts major worries over human rights issues – highlighted by Rainbow Devils’ statement on the importance of inclusivity of LGBTQ+ supporters and ‘deep concerns over some of the bids’.

Sir Jim Ratcliffe, Ineos

Sir Jim Ratcliffe is a Greater Manchester-born billionaire and Chairman of the Ineos chemicals group. He is also a supporter of the club, but previously submitted a bid to buy Chelsea from Roman Abramovich last year.

“Sir Jim Ratcliffe’s offer is for the Glazers’ 69 per cent holding rather than the entirety being bid for by Sheikh Jassim – with the possibility of buying remaining shares from investors on the New York Stock Exchange,” Dr Appadu continued

“Although it is not yet confirmed if Sir Jim’s bid includes wiping out current debt, no further debt would be added to the balanced sheet in acquiring the club – as was the case when the Glazer family bought the club.

“As owner of OGC Nice in France, Sir Jim and Ineos have existing experience of football club acquisition, but interest in another European club may create an extra hurdle in his bid to acquire Manchester United.”

As with Sheikh Jassim’s bid, Sir Jim Ratcliffe’s prospective ownership has come into question due to claims of greenwashing levelled towards his chemicals empire, and relations with employees. Dr Appadu sees this a potential pitfall in trying to win over supporters.

“Ratcliffe's historic treatment of workers, particularly when making alterations to pension plans, has resulted in numerous strikes.

“At the same time, the environmental impact of Ineos’ activities may lead people to think his bid is an attempt at greenwashing – using it to enhance Ineos’ corporate image.

Elliott Management, Investment management hedge fun

A third ‘bidder’ is Elliott Management, an American investment management firm.

This proposal is not a bid for ownership as such, but a route that could result in shares or debt financing in Manchester United. Dr Appadu believes this is the least favourable option for fans, but said it could be the most attractive one to the Glazers.

“Elliott Management’s offer involves helping to finance the club’s debt rather than looking to acquire a majority share holding. This may be favoured by the Glazers as it would see them maintain control, much to the ire of supporters.”

Regardless of the outcome, Dr Appadu expects the Glazers to benefit financially from the level of interest involved.

“Given that it was just a ‘soft’ deadline, we might expect other firms to bid at the eleventh hour just like Elliot Management which would delay the process.

“The Glazers will make a huge amount of profit as they invested between £150 and £200 million along with debt back in 2005, which will be worth a huge pay-out.

“The tax advantage will be significant for them as well, as Manchester United is now registered in Cayman Island rather than the United Kingdom.”

All quotes can be attributed to Dr Naaguesh Appadu, Senior Research Fellow at Bayes Business School (formerly Cass).

Bayes is hosting the panel discussion ‘Investments and Acquisitions of European Football Clubs’ on Friday 10 March. Book your place.

Find out more about the Mergers and Acquisitions Research Centre (MARC) at Bayes.