- Apr 28, 2023
The Guardian is certainly not reliable. I've friends who work thereThe sun, Daily star are particularly bad. Guardian, the times, Athletic for example - are more reliable sources.
Appreciate the in-depth post.Some brief thoughts on the lay of the land regarding the takeover and the transfer market:
(a) The share price at NYSE is $19 for a Man Utd share. If Sheik Jassim match Ineos' bid it should be $35-40 and if Ineos win the auction it should be around $12-15 (as before the takeover talk started, since Ineos won't buy the NYSE shares). Anyone with insight into the takeover talks and a lofty conscience could hence easily 3-4x an investment in a matter of weeks (if you know Ineos is winning, you can short the share). It is of course just guessing -- but I don't think anything is "done" yet. On avg., it's said that about 40-50 percent of Takeovers leaks before they are announced which also is my experience. At this stage with multiple bidders and so many people involved, it is just unlikely that we won't start to get leaks as soon as the odds really starts tilting in any direction. I don't think anything is done right now.
(b) If nothing is done -- what is going on? Someone is probably waiting for something, there have been enough time for everyone to make up their minds. An outside chance -- that always can happen -- is that one or two groups join forces. But odds for that is of course not high. So what are people waiting on? Could Glazer wait to announce that they won't sell to either Ineos or Jassim until after the season to avoid protests? Of course, but the thing is, the club is for sale for a reason. The fact that we finish top 4 is huge, but I can't see that it is enough. By all accounts, Ineos had the leading bid after the final deadline, and after that, Sheik Jassim's group's relations with the Raine Group fell apart and they went to the Glazers directly. First of all, for a financial advisor like the Raine Group to have a poor relationship with Qatar, is like a European football club being banned from all UEFA tournaments. They won't be able to get any assignment from a seller that has any kind of hopes for Qatar to get involved. So what can have caused Raine to not comply with Jassim's wishes in some regard? It's a straight purchase of shares. I can only see that it is about proof of funds. I.e., in an auction it is naturally a disaster if you go with a bidder, and it then turns out that they can't deliver and you have to go back to the other party and ask if it is still interested. I am just guessing, but my bet is that Jassim has told the Glazers to hold off going with Ineos until after it is decided if we get CL next season, at which point Jassim can take his business plan to the higher-ups of the Royal family in Qatar and/or other partners. I.e. that Jassim has been given a last chance to come up with the cash needed to match Ineos' bid.
(c) So things are leaning towards Ineos then? What do I know, but as I see things, I would -- not -- claim that. I think it's leaning towards a sale, but Ineos has by all accounts put forward a very lucrative offer to the Glazers that is significantly higher than Jassim's bid (for the Glazers, any other shareholder won't get a penny). Despite this -- it is not settled. That says a lot too.
(d) I think that it is quite obvious that Jassim got a fairly strict budget. I don't worry that they wouldn't spend on the club if they got it -- but the budget he got for his business plan is obviously limited. But he could of course get more backing in Qatar -- but as we heard from his dad, in the CNBC (or was it Bloomberg?) interview, its not a given that he will get it. We can discuss if the club is worth 3bn or 5bn or 6bn, but if we look at what sport franchises go for, I think that the Glazers getting just around 5bn for 100% of the club (i.e. of which they only take 69% or 3.45bn) -- is not a high offer. From Day 1, it has been known that it is any buyer's choice whether to just buy the 69% from the Glazers and get full control or the entire 100% (which is only necessary for any buyer that wants full freedom to for example develop land around OT). Any buyer willing to ant up 3.45bn can outbid this bid from Sheik Jassim. Compared to what other clubs you get for that sum, it is not that high. If the world economy wouldn't be tanking, I wonder if 3.45bn to the Glazers even get you to the second round of bidding.
(e) I am undecided about which buyer I want as long as the Glazers looses control of the club which we would get with either bidder according to the reports (nothing else makes any sense either). But I have to say that I think the talk about Jassim having "super wealth" resulting in that this club would operate in a completely different world with him compared to anyone else -- can be questioned. CFC have outspent everyone with Abramovich and Boehly. The last 4y, PSG have on avg spent 95m per season owned by Qatar and Man City have on avg. spent 157m per season owned by Abu Dabi. How about Real Madrid? The last three 3y, they spent an avg of 33m per season. The season before that, they spent 355m, but its still only 120m per year on avg. over 4 years. Without support from the owners, we can't build a stadium and we can spend about 100-150m per summer. If an owner supports us with say 600m over 4 years, we can outspend everyone else by a wide margin and make up for the head start MCFC got. By cheating, MCFC has de facto been able to -- match -- our investments in the squad, not outspend us. The problem if the Glazers stay is of course the stadium. But financing a stadium is something completely else than paying the Glazers transfer debt or creating huge debts to finance transfers. But to prevent it impacting our transfer spending -- that building must also be supported. But Boehly is building a stadium and financing transfers for CFC, why couldn't Ineos do the same for MUFC? We don't know if they will -- but I think odds are high that anyone interested in buying this club would do that. Our value is in us being a top 2-3 club in the world, its a different environment compared to when Malcom Glazer bought us as an extremely undervalued asset almost 20 years ago. The big difference with Jassim vs Ineos is probably for the city of Manchester. Being able to make infrastructure investments is what Jassim's bid is all about. Build hotels, use the land around OT, new train stations, malls etc etc etc. Are there any advantages with Ineos over Jassim? Look, for City and the Redbull group -- their multi club ownership structure has been massively lucrative. The same with CFCs youth academy. It sounds like Ineos want to create something like that. But at the same time, it of course has to be done well. Perhaps there are some soft values that would benefit us with Ineos, i.e. we wouldn't be state owned, can market ourselves as being more genuine. At the same time, Ineos' green washing aspect is genuine and its for example complete nonsense to not recognize the major impact a wide use of fracking in Europe would have on our planet.
(f) As reported by La Pais, in an article with information from a member in Jassim's transaction team, our executive management is pitching the idea that an owner can come in and spend 500m on the transfer market this summer, by using a new credit line with Bank of America that would survive a Change of Control. This is of course marketing -- but if we sell players to raise capital, like Lindelof and AWB, in addition to guys like Henderson, Maguire and McTominay, it massively impact how much we can spend under the FFP rules this summer. The FFP measures earnings, and the cost of signing a £100m player on a 5 year deal at 200k a week is £30m a year. If we sell Lindelof for 25m, it enables us to buy a player for 100m. If we sell Henderson for 20m, it enables us to buy another player for 100m. Just because Arnold is pitching this as "doable" to Ineos and Jassim, it of course doesn't mean that they have to do it. But I think odds are great that we will see a lot of spending this summer, I would bet at 300m rather than 100m. Possibly even up towards 400m. It must be done, it makes sense. But we need to sell players to enable it. This to me also explains why we are so heavily linked to a right footed CB despite Lindelof's excellent play lately, why we have been linked to a RB despite Dalot/AWB, and so forth. We need 2 strikers, 2 CMs, we are heavily linked to 1 CB and 1 RB, and we at least need a strong back-up keeper, if not a starter. I mean, that is 400-500m right there.
I break down the financial aspects here:
Reading between the lines I get the impression/feeling that it boils down to this:
If Ineos wins the bid, the Glazers get more money initially, get to stay on, but Jim won't go mental with the spending regarding transfers/stadium etc
If Jassim wins the bid, the Glazers don't get as much money, get kicked out the club, but will be like a kid in a sweetshop buying players/new stadium thereafter.
I could wrong, haven't had my morning cuppa and Weetabix yet, but that's what it sounds like.