Qatar’s Sheikh Jassim is reportedly gaining confidence in his pursuit to become the new majority stakeholder of Manchester United. The Premier League giants have been up for sale since November, and Sheikh Jassim, along with Sir Jim Ratcliffe of INEOS, appears to be the likely contender to replace the Glazer family as the club’s owners. Internal disagreements within the Glazer family have caused delays in the sale process, with some favoring Ratcliffe’s partial takeover while others prefer a full sale, which could be facilitated by accepting Qatar’s offer. Journalist Ben Jacobs suggests that Ratcliffe’s current offer may struggle to gain board approval, while Sheikh Jassim’s Nine Two Foundation bid is viewed as a cleaner transaction.
The Growing Confidence of Sheikh Jassim:
Reports indicate that Sheikh Jassim is growing increasingly confident that he will emerge victorious in the race to acquire Manchester United. Three official rounds of bidding have taken place, and the delay in the sale can be attributed to internal disagreements among the Glazer family. While Avram and Joel Glazer favor Ratcliffe’s partial takeover, the remaining four siblings prefer a full sale, which aligns with Qatar’s offer. The Nine Two Foundation, led by Sheikh Jassim, is reported to be positive following an improved fifth offer, despite skepticism regarding the Glazers’ intentions. Insiders suggest that the most likely outcomes are either a successful bid by Qatar or no sale, leaving many in the dark about the final decision.
Challenges Faced by Ratcliffe’s Offer:
Journalist Ben Jacobs asserts that Ratcliffe’s current bid is likely to struggle to gain board approval. The structure of his offer may require alterations to align with the expectations of the board. The Raine Group, representing Manchester United, continues to engage with multiple potential buyers. However, Ratcliffe’s bid is facing increasing pressure to be modified in order to gain board approval. On the other hand, the Nine Two Foundation’s bid is considered a cleaner transaction, which could work in favor of Sheikh Jassim’s aspirations.
Financial Analysis and Market Value:
According to Vive Mukherjee, a chartered accountant and football finance analyst, Sheikh Jassim’s latest £5.5 billion offer is seen as an overpayment by £2.5 billion, considering the club’s true value falls between £3.4 billion and £3.9 billion. Manchester United has around 54,500 ordinary A shareholders, while the Glazers own 110,000 class B shares. The current share price sits at approximately $25, with reports suggesting that the market value has exceeded $26 amid rumors of Qatar’s bid success. If the Glazers were to sell at the same rate as the stock market, the club’s value would range from £3 billion to £3.4 billion. However, the Glazers’ shares are likely to carry a premium, estimated at around 20%, bringing the total value to between £3.4 billion and £3.9 billion. Sheikh Jassim’s bid far surpasses the market value, even before factoring in the debt servicing investment. Even using the Markham model to value the club, the estimated pre-Covid-19 value of Manchester United was only £2.4 billion.
Conclusion:
Sheikh Jassim’s growing confidence in his bid to become the majority stakeholder of Manchester United signifies the ongoing developments in the club’s sale process. Internal disagreements within the Glazer family have contributed to delays, while Sheikh Jassim’s Nine Two Foundation bid is viewed as a cleaner transaction compared to Ratcliffe’s offer. Financial analysis suggests that Sheikh Jassim’s bid exceeds the market value, highlighting the potential over
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