Make yourself comfortable and get your popcorn ready – the Manchester United takeover pantomime is in full swing.
“The offer has been submitted”, you will be informed.
“Oh no it didn’t,” you can call back.
Wednesday night at 9 p.m. brought enough melodrama to make Widow Twankey blush. The day had been spent preparing for a climax when the Glazer family would eventually receive offers for United ownership.
The Glazers are, of course, the villains of the play for United fans. The siblings, who claimed the keys to Old Trafford in 2005 and have kept the club under rusting lock and key ever since, are now providing a glimmer of hope regarding their departure and both Sheikh Jassim Bin Hamad Al Thani and Sir Jim Ratcliffe have let it be known , through their representatives that they would submit improved bids from their indicative offers.
By the time the deadline expired, it was assumed that these bids had been submitted. Reports saying so much were published online. Then it turned out that something hadn’t quite gone according to plan. In the end, the offers didn’t come through. Live television stations had to untangle the crossed wires live on air. The headlines have been changed to reflect the “chaos”. Even those involved in the process would eventually admit that it was an extremely confusing time.
The potential sale of United, a multi-billion pound transaction requiring teams of lawyers and bankers, had taken on the appearance of a referral day scramble, with claim and counterclaim quickly competing for airtime. There wasn’t a Harry Redknapp giving an interview from his car window, but we weren’t far away.
So how does such farce come about, and why is a seismic event of such delicacy taking place so publicly?
Traditionally, acquisitions happen quietly, with these types of developments remaining behind the scenes, but this has been a very overt solicitation for a variety of reasons, not the least of which is that United will always attract a global audience.
More relevantly, however, the Glazers want top dollar for their fortune. However, the discrepancy between any logical valuation of United and their assumed price tag (£6bn; $7.4bn) is such that the pool of potential new owners is tiny. For comparison, the market cap (i.e. all stocks on the New York Stock Exchange combined) is around £3.5 billion. The club was put up for sale on November 22nd and in the months that followed only Sheikh Jassim and Ratcliffe raised their hand.
So to close the gap, the Glazers need an auction. You need to create a sense of urgency and competition. Step forward, Raine, the commercial bank handling the transaction. There were stories of multiple bidders willing to compete with Sheikh Jassim and Ratcliffe. The prospect of the Glazers staying if their price is not met has been debated. These stories don’t come out of nowhere. Raine is directly or indirectly involved.
On the other hand, Sheikh Jassim and Ratcliffe also have people speaking on their behalf. When it was revealed on February 17 that Qatar’s follow-up bid was being led by Sheikh Jassim, journalists were asked to contact Hanover, a London-based public relations firm, for more information.
You only have to hear Boris Johnson admit leaks before a parliamentary committee or check out Matt Hancock’s WhatsApp messages to know how this part of the world works.
Spreading his message through the English media has garnered tremendous support online for Sheikh Jassim. Flags and banners in support of Qatar have even been seen at Carrington and United games. Talking has an advantage.
Ultimately it will be the glaziers who decide who to sell to, but this communication is valuable in setting the stage for a gig should it come to that. Ratcliffe tried to do the same. All sides have sent messages through the media to convince the others that their view is correct and that their words face to face are true.
On Wednesday, both men confirmed through their representatives that their bids would be received. Figures could go up from £4.5bn (Sheikh Jassim) and £4.3bn (Ratcliffe) but they would also be reasonable (£5bn, perhaps). No one wanted to go crazy to meet the Glazers’ demands. The code was: if there are more bidders, let them exit.
But that didn’t quite work out. Instead, Ratcliffe asked for more time. Was that because the looming banking crisis made it difficult to raise money? There has been speculation about this. Curiously, Sheikh Jassim served on the board of Credit Suisse, one of the banks that collapsed, for seven years starting in 2010.
Was Ratcliffe’s request an attempt to regain leverage? By extending the deadline, he could observe who else is actually submitting a bid and adjust his bid accordingly.
Whatever the motivation, Raine accepted – only emphasizing that the deadline was of course always arbitrary, a construct of the salespeople.
GO DEEPER
Man United offer extended for Sheikh Jassim and Sir Jim Ratcliffe
Raine, guided in this process by Colin Neville, informed Sheikh Jassim’s team, who were processing the news, and decided to withhold his offer. The technical implementation was not immediately clear. You cannot recall an email directly. Was there a check at Ratcliffe before that?
Whatever the finer details, Sheikh Jassim was unwilling to make his offer if the situation might change. Could Ratcliffe, for example, have caught wind of the number in the meantime and launched his bid at the top? The commandments are so close.
Sheikh Jassim, whose line to Qatar’s sovereign wealth fund can be connected by dots, could afford more but he doesn’t want to overpay, we’re told. Not only is he cut from the same cloth as his father, Sheikh Hamad – Qatar’s former prime minister, known as HBJ, who said he sees football as an investment rather than a promotion – but paying excessively could mean inflated transfer fees now on the line.
The report of five to eight bidders does not change that. That number of full acquisitions would be the world’s best-kept secret, according to one observer. Minority interests are of course included in this total.
So far we know that Elliott Management has had a funding offer since the deadline at 9pm on Wednesday, and Thomas Zilliacus, a Finnish entrepreneur, believes his crowdfunding method – in which fans join to buy half the club – he the other – might work.
There has been talk among the people at United that there are three more offers for Sheikh Jassim and Ratcliffe. Buyout financier Ares has already held talks about financing, so could complete the quintet.
So much of it is about looks, looks and brinksmanship. Ratcliffe emerged outside the players’ entrance at Old Trafford as global media waited to capture his handshake with Chief Executive Richard Arnold. On the day that Erik ten Hag had a press conference, he toured Carrington and inevitably ran into United’s manager.
Ratcliffe took Sir Dave Brailsford, the Sports Performance Driver at INEOS, with him. They asked about the academy setup and football structure.
Sir Jim Ratcliffe paid a very public visit to Old Trafford alongside INEOS Sporting Director Sir Dave Brailsford (right) (Photo: Peter Byrne/PA Images via Getty Images)
Sheikh Jassim didn’t fly to Manchester at all, instead sending a team of advisors and bankers to sift through United’s financial data and forecast line-by-line growth. Neville was photographed with them before the 10-hour meeting.
Fady Bakhos, longtime close associate of HBJ, was Sheikh Jassim’s senior representative at Old Trafford and demonstrated the closeness between son and father. HBJ is considered one of the richest men in the world, having made his fortune as Qatar grew from oil and gas reserves. At some point, if Sheikh Jassim is successful, he will have to appear himself.
United’s stock price is a good indicator of when that might be. Shares traded above $25 a share on Wednesday, rising in line with bid expectations. Only when it starts to reach the price that represents what the Glazers are aiming for will a sale be completed. (Currently, the market cap is just over £3 billion.)
In fact, United shares slipped below $24 on Thursday as sentiment reformed that the Glazers are playing a game to hold on to the club and add value to earn cheap interest from lenders.
The poker will continue until the Glazers sell or stay permanently. Ratcliffe’s offer has now been received and Sheikh Jassim’s will follow. This amended deadline is intended to be fluid. Stay tuned until the curtain closes.
(Top Photo: Michael Regan/Getty Images)