Glazers out to sell chunk of United in Singapore…and have moved US HQ to the most secretive State in the US
Five years after telling Manchester United supporters their takeover would remove the club from the whims of stock markets, the Glazer family has announced plans to float around 25% of the club onto the Singaporean bourse. Apart from this being the equivalent of putting at least a quarter of the club in the hands of a Wild West about to go into meltdown, the first question to ask is why on earth the club needs to do that – in this way.
The short answer is ‘it doesn’t’….but the Glazers do. There is a great deal of drivel in most of the papers and news websites this morning, including lines like, ‘We’re going to open the door to fans by creating a foothold in Asia’ and ‘the Glazers want to use whatever cash they get in to give Manchester United cash to go out and buy players’. But the truth is very simple:
1. Had the Glazers not bought United in the first place, the club wouldn’t have any debt at all….and could help finance player deals via issues as a plc.
2. Had MUFC not been paying half its profits in recent years to pay the Glazer-created debts, it wouldn’t be costing them £45M a year to service those debts now…as it would be debt-free. Do the maths – it’s obvious.
3. A partial IPO now would lock out any takeover by a third party – something the Glazer family is keen to do, given the continuing strength and popularity of the anti-Glazer Red Knights.
4. The launch plan stands every chance of being introduced at a time when the share sale might flop. Although this could in theory clear the way for an MBO to turf out The Cryogenic Family, more likely is that – as interest rates rise – the club could see its valuation falling rapidly, and its debt servicing on a steep rising curve.
A Red Knights source told the Slog this morning that “It’s pretty impossible to like the look of anything involving the current owners…[the float will] allow them to clean up, pay some of their debts off – but to still have control. It’s typical of their way.”
It is indeed. They’re after ROI and deleveraging….with other people’s money, as usual. Maybe potential investors should examine Glazer history more carefully…and take note of some recent moves of which most United fans are not aware.
In 2005, Man United supporters had a choice of two evils. The club’s biggest shareholders, J.P. McManus and John Magnier, were attempting to force legendary manager Sir Alex Ferguson out of the door because of a dispute over a racehorse that the three jointly owned. On the other hand, there was the creeping threat of American tycoon Malcolm Glazer buying up a steadily expanding chunk of the club. Glazer reached an agreement in May 2005 to buy out Magnier and McManus..
Glazer secured the funds for his repeated United share purchases through a series of loans, money lent by hedge funds and secured against the club’s assets. One of the hedge funds failed to transfer its money by the deadline to secure the deal with Magnier and McManus, and the deal appeared doomed to collapse. But then another bank stepped in and rescued the deal: it was a kick-bollock-bits-of-string lash up that symbolises the Glazer family’s style: seat of the pants, grubby and secretive.
The size of millstone dumped onto MUFC by the time the Glazers secured their 100% of shares was unacceptable to most supporters because it saddled the Old Trafford club with nigh on £1billion of debt. The Glazers argued that by delisting United from the stock exchange, it would have more control over its destiny. In fact, Glazer carpetbagging ensured yet more secrecy – and, effectively, allowed the family to buy MUFC with its own debt.
As the Glazers faced a 2017 deadline to pay the balance of money to various Hedge Funds (and their situation wasn’t looking good) the Glazers secured a bond issue that would allow them to take half of the club’s cash profits to pay down the loans. By late last year, the loans were paid off – £200million that could have gone on buying players – but now it seems even this is shrouded in mystery.
Probably very few Redeyes know this, but the source of the bond monies – and any strings attached to it – are still secret. This was made possible by the Glazers shifting control of the holding company – Red Joint Ventures – to new headquarters in Delaware…..a state where companies can keep their revenues and shareholders entirely secret.
The talk is of a 25% flotation, but other sources suggest it might be closer to a third of the equity. Once again, the destiny of the club is being put into the hands a range of globalists with conflicting agendas….none of them designed to the help the Club prosper and succeed.
You don’t have to credit The Slog – just get this piece to as many fans as you know.