There are around 163,000,000 shares outstanding (public float + privately held Class B). $30-35 share price means a market cap of around $4.9-$5.7B USD, or around £4-£4.6B. I have seen debt reported anywhere between £600M-£1B, but haven't cared enough to really dig into that. If media reports are to be trusted, a successful Qatari bid may be closer to $35 per share territory. $40 per share just on speculation (not even the takeover price) is not in line with the reported figures.
Appreciate your input, but a few things.
40$ per share does have a link to the reported figures. Ineos bid is reported to value the club (EV) at £6bn. The debt is (was, the sterling recovering some on the USD will have reduced it a bit) £781m. If 9-2 is to match that with a merger offer, it is £6bn minus 781m times 1.2 (£/$) divided with 169,000,000 =
$39 per share.
I strongly disagree that the share price reflects the odds of who wins the bid. In my view, all that is reflected there is the risk/reward profile of the market from a potential takeover, based on written confirmation from the Company that they are reviewing strategic alternatives.
You are the financial expert so this should be your home turf, I am just a lawyer -- but I must correct you here -- of course it does as a rule. Is it possible for like wallstreetbets to manipulate the share price? Of course, but we haven't seen that type of movements, so while you of course cannot take the share price as definite proof of the state of a merger, you can as a rule certainly draw conclusions from it.
Something must be lost in translation. (a) What you are saying is the same thing, doesn't "the risk/reward profile profile of the market from a potential takeover," reflect how likely the market thinks a bid is, i.e. the odds for a merger to take place? Of course it does. If the market assume that a takeover will take place, the shareprice is generall very close to the offered price. Of all the successful takeovers I have worked on, I don't think I ever has seen a share price 10% below the offered price (unless my side was the winner after a bidding war). If the market thinks there is a big risk for a takeover to not take place, the share price drops down towards the levels it was before the announcement, and often lower. If Wall Street believed that there was a strong likelihood for a successful takeover by Qatar., it would be noticed in the share price. The fact that the free float is limited, would increase the impact on the share price rather than decrease it. Or are you saying that the turnover is so limited that you can't even bother to trade with it? But is it that extremely limited?
(b) If you have a stock that that sat at $15 before an auction process was announced, you have (1) a merger proposal at say $34 per share, and the share trades at $19.04 and (b) an offer for a simple OTC transaction regarding the main owners shares (in a jurisdiction without any Mandatory Bid provisions) -- I would definitely say that conclusions can be drawn about how likely the market think the merger proposal is to succeed. So how likely does the market think that a full merger is at this point? This is definitely your home turf, but given that the share price topped out around $26.84 when the Qatari news rocked the hardest and have dropped to $19.04 since, it doesn't seem like a daring gamble to state that the market isn't that convinced of a full merger with 9-2.
I wrote what I did in reply to a post quoting a blogger claiming to know that Qatar had come in with an improved merger offer that had been accepted, and my reply was, nothing is happening to the share price, the market doesn't seem to believe that report if it was aware of it, and it was all over twitter.
The float is so low that it does not take much to get it moving based on speculation from football journalists (including disreputable ones) or even random Twitter rumours. To demonstrate this with a recent example, that QatariFC guy posted something yesterday at 3 pm, and look at what happened to the share price. The daily swings are primarily a function of speculation. The shares are still trading at a hefty premium compared to pre-Raine news, and were holding at $20+ for most of it. I am of the opinion that the action in the last few weeks is just a function of the uncertain timeline compared to what was previously reported, Ratcliffe repeatedly being billed as the favourite by the press, and the absence of news like in the winter that suggested the Qataris were just going to blow everyone away with an aggressive bid (by all accounts in the press, that does not appear to be the case).
This is apples and oranges in relation to what I was talking about. From my POV, nothing has happened to Man Utd share price the last 30 days. Its low is 18.46 and high is 19.19. There has been surprisingly little movement. If there were credible reports that Qatari was going to have a take private merger of the club approved -- I would be shocked if the share price didn't top $25.
Regarding "50% of takeovers are leaked" (based on trading activity before a public announcement), I can only speak from my experience, but that looks way off.
They actually do often leak, my experience is that it of course isn't a "50 percent" risk of leaks (the seller would perhaps say "chance" instead of risk, since they leads to increased premiums), but bigger takeovers often leaks. This report has it at 42 percent:
https://markets.businessinsider.com...on-dollar-deals-leak-early-2019-12-1028741665
I am not saying that Sweden is representative, but here its over 40%.
All I am personally taking from the share price is this: the market is still expecting there to be a transaction of some kind, but the market hates uncertainty and this process dragging out past what the media predicted + a lack of recent news on the Sheikh's bid have weighed it down. That combined with the pro-Ratcliffe news cycles. In my opinion, for reasons I outlined before, the activity is fueled entirely by speculation over whether there is a full takeover or not and should not be read as gospel to gauge which outcome is more likely.
Well, I agree 100%.
Since I think we both agree on what the share price is "not" saying, i.e. that the market thinks a full merger with Qatar is a done deal..
With all the above said, the one unknown for me is the potential for courts on the Cayman Island accepting a lower per share price for the A shares compared to what Qatar would offer for the B shares in a merger. This would never be accepted in the Europe, nor in the US I suspect (which is supported by some general googling), for obvious reasons.
