cross-posted from: https://lemmy.world/post/6811388

Manchester United’s board is set to vote on selling a minority stake in the club to British billionaire Sir Jim Ratcliffe after Sheikh Jassim’s Qatari group claimed to have withdrawn from the race.

The protracted battle to buy the Premier League club from the Glazer family, who put it up for sale last November, has been a two-horse contest between Sheikh Jassim’s Nine Two Foundation and Ratcliffe’s INEOS petrochemical empire.

Amid PR briefings and fan protests over the course of almost a year, neither bidder has met the Glazers’ asking price of $8billion (£6.4bn), with both parties instead valuing the club at closer to $6.3bn (£5bn).

But representatives from Sheikh Jassim’s bid delivered a twist on Saturday night when they claimed that, after further discussions in recent days, the Qatari royal had informed the Glazers that he was withdrawing from the process.

Sources close to INEOS and at Manchester United now believe the Glazers are moving towards selling a minority stake of 25 per cent to Ratcliffe.

Those sources, who are not permitted to speak publicly due to confidentiality agreements, have told The Athletic that a deal with Ratcliffe has been agreed in principle, subject to board ratifications — with key club figures due to meet and vote on the proposed deal in the coming days.

Ratcliffe’s minority stake would potentially give the billionaire sporting control of the club (more on that below) but deny fans a clean break from their unpopular owners.

Here, we explain the latest developments, what we know — and still don’t — about what happens next, and what it all means for Manchester United.

How did we get here?

Right, deep breath.

On November 22, 2022 — the same day Cristiano Ronaldo and United parted ways for the second time — United released a statement detailing the beginning of a review that would see the Glazer family explore “strategic alternatives” in regard to ownership and investment.

This included the possibility of a full sale. Crucially, however, it also said: “There can be no assurance that the review being undertaken will result in any transaction involving the Company.” The Raine Group was instructed by the Glazers to conduct a similar process.

A soft deadline of February 17 was set for those who would be interested in either buying or investing in United to express their desire to do so. On March 16, a delegation representing Sheikh Jassim visited Old Trafford as United opened its doors for potential buyers to meet and question senior officials from the club’s hierarchy. Ratcliffe attended the following day, joined by his most trusted aides. Ratcliffe was met outside the stadium by Richard Arnold, United’s chief executive.

US hedge fund Elliott, and fellow American organisations Ares, Carlyle and Sixth Street also offered minority investments in United.

Once it was clear all the bids had been submitted — and after a considerable bit of claim and counter-claim — another date, April 28, was marked in the diary as a new deadline for improved offers to be submitted. Sheikh Jassim and Ratcliffe both made revised bids.

Any anticipated raise from Sheikh Jassim did not materialise, while reports surfaced of Ratcliffe proposing a deal that would see him gain a majority of slightly more than 50 per cent and allow Joel and Avram Glazer to stay on as minority shareholders.

This news brought attention from shareholders of United’s Class A shares, which are traded on the New York Stock Exchange and worth ten times less voting rights than the Glazers’ Class B shares. Some of these investors threatened legal action on the basis their shares would shrink in value because Ratcliffe had no intention of buying them immediately; they would effectively have none of the upsides enjoyed by the Glazers.

Sources say this prospective lawsuit made United’s board members nervous, and so would not be sanctioned by them — meaning Ratcliffe had to recalibrate his offer.

His new proposal is for a smaller 25 per cent share. Sources say he believes it includes provisions that have satisfied the previous issues. It is also expected Ratcliffe wants to grow his shareholding over time into an overall majority. He has held discussions on a plan for exactly how that would happen. A spokesperson for INEOS declined to comment when asked if Ratcliffe’s offer for the 25 per cent stake is up to £1.3billion.

As talk of Ratcliffe’s confidence grew louder, Sheikh Jassim held further talks with the Glazers in the past week. Sources say principal adviser Shahzad Shahbaz was also involved. The bid increased from April’s “final” offer to what people close to his camp say is almost double the $3.2billion market valuation of the club. The proposal included a further $1.7billion to go into the club to finance rebuilds of the stadium and training centre, buy players, and go towards community schemes — a figure which also increased in recent days. The apparent failure of the bid has been put down to money, with Ratcliffe able to offer a higher fee per share due to taking a smaller initial stake.

But why has it taken so long?

The Glazers bought their first shares in Manchester United 20 years ago. For them it was the start of a beautiful friendship, one they have been very reluctant to give up. And who can blame them? What started with soft loans and management fees blossomed into a nine-figure windfall from a partial flotation on the New York Stock Exchange, before settling down into a comfortable life together, with regular dividends. That kind of relationship is hard to let go, even when the romance has gone.

Not that there was any romance with this one. Actually, now that we think about it, the relationship arc has gone from distrust to disgust.

Either way, we think the Glazers have demonstrated that they have thick skins and they clearly do not see many green and gold scarves in their gated communities in Florida.

Perhaps the better question to ask here is how long should the Glazers’ final shakedown at Old Trafford last? A month? Three? Why? What’s the rush? They have been pulling money out of this cashpoint for 20 years. Who says they are on the clock?

It feels like it has taken so long because the rest of us are trying to imagine what we would do in the Glazers’ shoes, with all those angry fans shouting at them, and what was once a sporting powerhouse visibly diminishing on their watch. That must be awful, right? Why not just take the money and let somebody else have a go, right?

Stop it! The Glazers are nothing like you. They don’t think like you and they have no idea what the last paragraph means.

They own an asset that they bought for £790million two decades ago. They think that asset is now worth…. eight, 10 times that? Who knows? Let’s find out. And that is what they have done. Nothing else matters. And when that is the case, who cares how long it takes.

Who will make the decision at the board meeting?

The Glazers. Next question.

OK, you want to hear a bit more about the three independent executives on the board — John Hooks, Robert Leitao and Manu Sawhney? Their role is to stand up for the rights of the minority shareholders, make sure everything is done in accordance with the company’s articles of association and generally hold the six Glazer siblings to account. Sources say these responsibilities gave them pause for consideration when investors threatened personal legal action over Ratcliffe’s previous bid for the club in June.

There are three other directors on the 12-strong board: chief executive Richard Arnold, chief financial officer Cliff Baty, and the club’s legal counsel Patrick Stewart.

But this is still the Glazers’ club. They own 96 per cent of the voting rights.

It is their decision.

What would this mean for the current hierarchy?

Much depends on how much control Ratcliffe would get with his 25 per cent stake. Sources say his deal is premised on influence over sporting decisions, which brings uncertainty to the entire football department.

Sir Dave Brailsford is Ratcliffe’s sporting guru at his cycling team and Nice, the Ligue 1 side he owns, and would be expected to get a job at United. What that means for football director John Murtough, and those who work under him, is unclear. Erik ten Hag’s position is thought to be safe, whatever happens.

Talks over Richard Arnold’s role as chief executive would also be anticipated, although that may depend on if, when and how Ratcliffe increases his holding.

Why would a minority stakeholder get sporting control?

Because that is the price Sir Jim Ratcliffe is demanding for his very generous — and completely out of character — offer to give the Glazers’ a premium price for what looks like a very mediocre slice of the pie.

There is absolutely no other reason why anyone who owns only 25 per cent of the company would be given such enormous power. After all, Manchester United are still, just about, first and foremost a sports team. And controlling that bit would appear to be the most important bit.

The Glazers, however, are clearly streets ahead of the rest of us and see Manchester United for what it really is: a global advertising and retail brand in the leisure and entertainment industry. Who runs the football team is of minor concern when there are eyeballs to monetise in Malaysia. When that is your focus, letting INEOS hire and fire coaches is akin to letting Sir Jim wash the kits, too.

INEOS, of course, will see this very differently. They are all about performance, as their cycling, sailing and running teams constantly remind us. Striving for elite performance, distilling it, packaging it, is what INEOS does. Or certainly what it likes to say about what it does. It is what drove Ratcliffe to create his empire of cast-off and unpopular companies and it is what has inspired him to take a crack at reviving fading British brands like the Land Rover Defender, the Belstaff fashion label and now Manchester United.

So, he will happily start with sporting control, because that is what excites him and his mates. And he will let the Glazers continue to play at being masters of the sports industry universe for a bit longer. But he will eventually take that responsibility off them, too.

Who is Sir Jim Ratcliffe?

Ratcliffe, 70, owns the petrochemicals giant INEOS, which says it comprises 36 businesses at 194 sites in 29 countries with more than 26,000 employees.

His net worth, according to the Bloomberg Billionaires Index, is $13.6billion (£11.3bn) but the Sunday Times Rich List — an annual list compiled by the British newspaper — estimated him to be worth £29.6bn, making him the second-richest man in the UK.

He describes himself as a boyhood United fan, although he did make an attempt to purchase Chelsea when the club was for sale in 2022.

Ratcliffe is a UK tax exile who backed Brexit, albeit a soft one, and thinks the UK government’s stance on fracking is “pathetic”.

He grew up in Failsworth, a few miles from Manchester city centre, and then his family moved across the Pennines to Yorkshire, where he was enrolled at Beverley Grammar School, just north of Hull.

He read chemical engineering at Birmingham University, then worked for Esso after graduation, before moving into private equity at Advent International.

In 1992 he co-founded chemicals firm Inspec, and six years later formed INEOS.

He also already owns two football teams: Lausanne-Sport, since 2017; and Nice, his other “local” club — close to his home in the south of France, 13 miles west of Monaco.

And it’s not just football: Ratcliffe owns one-third of the successful Mercedes F1 organisation; the INEOS Britannia sailing team, helmed by English multi-Olympic gold medallist Sir Ben Ainslie; and the INEOS Tour de France-winning cycling team.

He also has a pub, the Grenadier pub in London’s Belgravia; Lime Wood, a five-star hotel in the New Forest, in Hampshire near Southampton; Le Portetta, a ski resort in Courchevel, France; and two super yachts, named Hampshire and Hampshire II.

Other assets include Belstaff, the clothing company.

What is INEOS?

INEOS is the fourth-largest chemical company in the world, and produces chemical and oil products which are used across industry and everyday life.

If you have used a product containing plastic, textiles, medicines or hygienics in recent years, chances are you have used something INEOS has helped to manufacture. It also produces chemicals and compounds used in the sport, including plastic used in artificial grass, stadium construction, seats and goal nets, rubber and PVC used in footballs and plastics in boots.

Ratcliffe has made his fortune out of spotting value in the market. INEOS is basically a conglomerate of businesses he bought between 1998 and 2008, which are still run in a relatively loose, federal style. In this regard, he is similar to Todd Boehly, the investor who ultimately won the Chelsea takeover contest.

At INEOS, he used high-yield debt to finance deals and started hoovering up unwanted operations from British Petroleum (BP).

In 1998, with a young family, Ratcliffe mortgaged his house and put all his money into the deal.  “If it goes wrong, you’ve lost all your money and completely screwed up your career,” he told the Financial Times in 2014. What did his wife think? “She accepted it was a risk.”

INEOS eventually bought Innovene, BP’s refining and petrochemical arm, in 2006, and in its first 10 years, INEOS completed more than 20 acquisitions. Its strategy was relatively simple: take on debt to buy the asset, reduce the outgoings via cost savings and build it back up.

When the global financial crash happened in 2008, INEOS struggled to deal with the sharp decline in oil prices and the company closed some factories. INEOS also broke a covenant and had to renegotiate debts with several banks at a cost of £804million ($966.4m). Ratcliffe asked the UK’s then-Labour government for a short-term deferral of a VAT payment worth £350million ($420.7m), but the request was turned down.

INEOS is also a major consumer of fossil fuels and, therefore, a significant generator of greenhouse gases such as carbon dioxide, and the company’s record on environmental concerns has often been questioned.

On its website, INEOS insists that “sustainability is fundamental to how we do business” and that its strategy is “to develop and manufacture the products needed to address the evolving challenges of climate change, public health, resource scarcity, urbanisation and waste, in a way which drives us all towards a net zero emission economy by 2050”.

Why did the Qatar bid fail?

We are likely to hear several reasons put forward in the coming days and weeks as to why this wonderful proposal fell short.

We will hear that the Glazers were worried about being upstaged by somebody richer, better, younger and more popular than them. We will hear that Sheikh Jassim’s bid was blocked by opposition from the rest of the league as they were terrified at the prospect of competing against a Manchester United fuelled by Gulf wealth. Or that UEFA was going to cause some trouble by suggesting the Qataris of Manchester United were a little too close to the Qataris of Paris Saint-Germain.

No. The Qatari bid failed because it did not do what it was meant to do; it did not blow INEOS out of the water.

Ratcliffe was meant to be the cautious and disciplined bidder. Sheikh Jassim was supposed to look at the INEOS bid, scoff and scribble a bankers’ draft for double the amount.

Instead, Sheikh Jassim (or was it his dad, Sheikh Hamad bin Jassim bin Jaber Al Thani, a famously cautious and disciplined bidder?) played the long game. He did not get panicked into paying over the odds for a heavily indebted and recently loss-making enterprise that requires a significant injection of turn-around capital.

In short, he was sensible. Too sensible. And he lost.

What now for Sheikh Jassim?

Manchester United are not the only club seeking investment, so it is entirely plausible that Sheikh Jassim will look to pour his money into another team.

However, much was made about his affinity to United — even submitting his bid via the Nine Two Foundation — and that will make it difficult for the Qatari royal to go down the boyhood fan route elsewhere.

It is still too early to say what Sheikh Jassim’s next move will be and no suggestion has been that he will look to bid for another club. But he was recently linked with a takeover of Italian side Inter Milan.

Will United fans be happy or is the Glazers staying an issue?

The Glazer family’s ownership has faced opposition from United supporters from its inception due to the nature of their leveraged buyout in 2005, which borrowed money against the club to make their takeover possible.

United have remained in debt ever since — their gross debt stands at £725million — while a similar figure has been paid out in interest to service the debt over the same period. The Glazers have also paid approximately £165million in dividends during their tenure, mostly to themselves.

Anti-Glazer protests have been a regular occurrence at Old Trafford over the years, particularly since the announcement of the club’s potential sale last November.

Despite concerns about Qatar’s human rights record and accusations of sportswashing, many fans preferred Sheikh Jassim’s bid for 100 per cent of the club as it was the only offer that would bring the Glazers’ 18-year stewardship to an end.

Ratcliffe’s minority deal will keep the Glazers in position, at least initially, and is likely to face a backlash from some supporters as a result. Others may be placated by the prospect of a full INEOS takeover further down the line.

What might it mean for Manchester United’s transfer spend with their FFP so tight?

United spent approximately £177million during the summer transfer window but found themselves limited by concerns about their compliance with financial fair play (FFP) regulations.

Years of big, and often wasteful, spending have caught up with the club and, at the recent fans’ forum, United admitted “continued heavy investment in player recruitment and wages” had left “limited room for manoeuvre” within both UEFA and the Premier League’s respective rules.

Both sets of regulations allow for clubs to overspend by a certain amount provided those losses are covered by funding from owners. Due to the Glazers’ reluctance to put their hands in their pockets, United have never been able to make use of that leeway.

A change in owner might have allowed for an injection of cash that would widen the club’s FFP margins and offer more latitude in the January market — particularly if the Sheikh Jassim bid had been successful, given the Qatari royal’s promises of investment in the playing squad.

The INEOS bid has not made the same guarantees — not yet, at least. And with the Glazers remaining in place, as it stands, United will still have to take care to remain FFP compliant going forward.

What does it mean for the stadium?

The whole strategic review was sparked because the Glazers realised the enormous cost of renovating or rebuilding Old Trafford, which master planners priced as potentially more than £2billion. Ratcliffe’s proposal does not answer that fundamental question. It may mean a further round of investment is required to generate funds for a meaningful stadium upgrade.

What would happen if the board vote against selling the minority stake?

It would be back to the drawing board, with Ratcliffe needing to figure out another bid.