The six Glazer siblings could keep their stake in Manchester United in a proposed phased takeover of the football club by Sir Jim Ratcliffe, who is looking to cut through the shareholding structure and family dynamics that have complicated the deal.
The Glazer family began a strategic review more than six months ago, but the process drags on with just two full takeover bids for one of the biggest names in global sport.
The bid from Ratcliffe and his chemical empire Ineos is complicated because, unlike a rival proposal from a Qatari bidder, he does not want to buy 100 percent of United’s shares all at once, people close to the talks said.
United is listed on the New York Stock Exchange, but the Glazers control 95 percent of the voting power thanks to a special class B stock. The listed A shares, which are largely held by minority shareholders, have minimal voting rights.
Ratcliffe, who flew to New York for talks last month, is seeking to acquire at least enough B shares to give him control of the club, in a bid that is not expected to be extended to common shareholders.
Some people in the process and those with links to the club had expected United co-chairs Joel and Avram Glazer to want a deal that would allow them to keep their shares and extend their stay, with their four siblings – Bryan, Darcie, Edward and Kevin – completely abandoned.
Several people said the process, first announced last November, was complicated by a lack of cohesion between Glazer’s six siblings. The Glazers have also received several offers from investment companies to provide funds to inject into the club without a change of control.
However, two people in the know said the Glazers are now focused on a structure that would allow the six siblings to sell their holdings in proportion to their holdings, allowing Ratcliffe to take control.
Ratcliffe and Ineos would buy the remaining shares of Glazers through derivative contracts over the next several years.
The structure of Ratcliffe’s offer means he can part with less capital up front, acquire a majority stake and invest in the club.
“The penny has started to drop,” says one of the people. “There is no obligation to make an offer for all shareholders.”
Uncertainty surrounding a deal has weighed on United’s publicly traded shares since their mid-February high of $27. At the current share price of $18.63, United’s net worth is valued at about $3 billion.
One issue with Ratcliffe’s plan to purchase the B shares is that according to U.S. stock exchange documents, the Class B shares “automatically and immediately” convert to Class A shares upon transfer of the Glazers “to a person or entity that is not an affiliate of the Holder”.
One possible solution is for the Glazers to vote for amendments that would allow the B shares to transfer to Ratcliffe without turning into A shares, two people close to the process said.
The Ineos group has remained flexible in structuring to increase its chances of winning the Glazers, in a bid that United is expected to value at more than £5bn ($6.25bn), including debt. No deal is guaranteed and the structure could change, people warned.
Despite growing frustrations among fans over clarity over ownership of the club, no deal is expected anytime soon. United’s performance on the pitch has improved this season, with the final game at Wembley on Saturday coming in the FA Cup final against crosstown rivals Manchester City.
The club has already won the League Cup and finished third in the Premier League, qualifying for next season’s lucrative UEFA Champions League.
United supporters have long protested the Glazers for piling debt on the club after taking control in a £790 million leveraged buyout in 2005. Fans are also complaining that United’s Old Trafford stadium is falling behind rivals, while the Glazers have taken dividends from the club.
The US owners’ role in the failed attempt to establish a European Super League breakaway two years ago sparked further fan anger.
United’s board met last week and received updates on the various offers in a process led by U.S. investment bank Raine.
A person aware of the meeting said Ratcliffe’s appeared to be the more serious of the two bids at this stage, but there were still a number of issues to be resolved.
Ineos, United and Raine declined to comment.
