Home » Chaos and confusion engulfs Qatar’s bid for Manchester United as Sir Jim Ratcliffe takes early lead

Chaos and confusion engulfs Qatar’s bid for Manchester United as Sir Jim Ratcliffe takes early lead

by Derick Kinoti

There is confusion over the exact figure of Sheikh Jassim bin Hamad Al Thani’s bid for Manchester United.

Yesterday The Peoples Person covered a multitude of reports which relayed that both Sheikh Jassim and his main competitor in the race to buy Manchester United, Sir Jim Ratcliffe, had submitted their third and final bids for the club.

It was indicated that Sheikh Jassim’s debt-free bid was around £5bn ($6.3bn). His offer also was said to contain a sweetener – the promise to inject significant funds into revamping Old Trafford and the club’s Carrington training complex.

The value of Sir Jim’s third proposal was not disclosed.

Today, it was relayed that whilst a lower total amount than Sheikh Jassim’s, Sir Jim’s offer actually values the club higher than the Qatari’s and the British businessman is in fact leading the race to take over the reins at Old Trafford.

According to the reliable Ben Jacobs, there are confusing reports from Raine Group, the merchant bank acting on behalf of the Glazers and representatives of Sheikh Jassim over the exact value of his third bid for the Red Devils.

Jacobs says, “Insiders claim Nine Two Foundation’s total offer is circa £5bn ($6.3bn), but number includes the debt & around £0.8bn ($1bn) in pledged investment. Latter not on top.”

“This means Sir Jim Ratcliffe’s bid, for control of the club, is significantly higher, with some sources indicating it has been all along. As discussed earlier, confusion and conflict over Sheikh Jassim structure.”

Jacobs adds, “Those close to Nine Two Foundation simply indicate their offer (which they still say is slightly above £5bn) is competitive and that it’s normal for any group seeking a ‘smaller’ investment to pay more than someone offering 100%.”

“But this is all very significant. Although Qatar’s total may appear competitive (especially compared to enterprise value of the club), and pledged Manchester United investment is vital. But offering latter within this process is seen as irrelevant and essentially ‘boosting’ the bid number.”

Jacobs compares the ongoing United takeover to Chelsea’s sale last year. During the Chelsea sale, the amount of investment to be put into the club was important as Roman Abramovic was keen to ensure that the next custodian had enough funds and good intentions to sustainably run Chelsea and ensure its sustained success on the pitch.

For United, this is not the case with the Glazers. The Glazers are only interested in the club’s valuation, based on 100% of the shares. The Glazer family hold 69%.

Jacobs further points out, “Based on this, Nine Two Foundation’s offer (the part the Glazers will look at) is said by some sources to be closer to £4bn ($5bn) because pledged investment is inclusive not in addition.”

“This would mean the offer would not be a world-record one for a sports club, although again Qatar side adamant their number is much bigger.”

As per Jacobs, the Glazers are prepared to lower their initial asking price as they prefer a full sale of United.

“It is now understood the Glazers may strongly consider an outright sale for between £4.8bn ($6bn) and £5.6bn ($7bn), which is a bit lower than the often quoted £6bn ($7.5bn).”

“The Glazers still remain determined sellers for the right price, but it is indicated that the Nine Two Foundation would effectively have to add an amount similar to their pledged investment (£0.8bn/$1bn) to the club valuation part of their offer to stand a realistic chance.”

Sir Jim’s offer is believed to be in the lower-to-middle range of what Raine and the Glazers could accept. Jacobs insists that for Sheikh Jassim’s Nine Two Foundation to own United, they will ultimately have to increase their offer if they are afforded the opportunity.

If they do not do so, they will be eliminated from the process.

In this case, the Glazers will either proceed with Sir Jim as the preferred buyer or explore alternative strategic options such as minority investments from the likes of Elliott Management, Ares Management and Carlyle.

Nothing definitive is expected this weekend as the Glazers have their full attention on the NFL draft.

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