Glazers to generate $400m by selling 24m Class A shares (apparently not)

[Maticmaker]

I always think, better the devil you know.

I would tend to agree with this, the clubs finances, by and large are OK, the investment in players has been there but not used successfully, although the latest three players acquired, Maguire, AWB and James, would seem now to be our best players!

The Glazers have 'grown the asset' from £0.8B to £2B (estimated) and might be tempted to cash in...but then who would want to purchase the club right now and what would be their motives?

Someone with maybe £3B to spend, £2B to purchase and £1B to spend on improvement... in your dreams maybe? However profit driven the current owners might be, there are certainly worse alternatives!

 

[red thru&thru]

I would tend to agree with this, the clubs finances, by and large are OK, the investment in players has been there but not used successfully, although the latest three players acquired, Maguire, AWB and James, would seem now to be our best players!

The Glazers have 'grown the asset' from £0.8B to £2B (estimated) and might be tempted to cash in...but then who would want to purchase the club right now and what would be their motives?

Someone with maybe £3B to spend, £2B to purchase and £1B to spend on improvement... in your dreams maybe? However profit driven the current owners might be, there are certainly worse alternatives!

The better the devil you know is fine. I'm happy enough to keep the Glazer's. If they want to rinse money out of the club, that's fine. However, I want my team to be winning trophies again. I want investment in the stadium.

Now if they do not want to sell, they need to bring in the real footballing men. Bring in people who actually know what they are doing and who have a proven record of this.

They are then most welcome to keep the ownership of Manchester United.

 

[Tincanalley]

The better the devil you know is fine. I'm happy enough to keep the Glazer's. If they want to rinse money out of the club, that's fine. However, I want my team to be winning trophies again. I want investment in the stadium.

Now if they do not want to sell, they need to bring in the real footballing men. Bring in people who actually know what they are doing and who have a proven record of this.

They are then most welcome to keep the ownership of Manchester United.

Well I am not happy enough with the Glazers. They took over the club in a hostile takeover. They have installed a clownish puppet as CEO, and are bleeding the club dry. They have a proven record, and one in the US as well, it appears, of running their asset into the ground. They are anything but welcome.

 

[fergiesarmy1]

I want my team to be winning trophies again. I want investment in the stadium.

They are then most welcome to keep the ownership of Manchester United.

Neither are happening or look likely to happen so seems a strange outlook.

 

[Bestietom]

I just want to see the back of the Glazers and Woody.

 

[red thru&thru]

Well I am not happy enough with the Glazers. They took over the club in a hostile takeover. They have installed a clownish puppet as CEO, and are bleeding the club dry. They have a proven record, and one in the US as well, it appears, of running their asset into the ground. They are anything but welcome.

I'm guessing you totally missed the point I was making?!

 

[red thru&thru]

Neither are happening or look likely to happen so seems a strange outlook.

Eh? When did I say either are happening or look like happening? Did you even read my post?

 

[Corwin]

I just want to see the back of the Glazers and Woody.

Would be a dream for every MUFC fan but can't see them leaving

 

[Sassy Colin]

Great post. Thank you.

No it isn't, it's a load of fantasy tosh.

 

[red thru&thru]

No it isn't, it's a load of fantasy tosh.

Oh ok. Please do elaborate...

 

[Johan07]

Oh ok. Please do elaborate...

Should not have to. Its complete bullshit. I was going to reply to that post, but I took a step back when I recognised it would take one or two hours off my life. It really should not be needed to be elaborated on.

 

[fergiesarmy1]

Eh? When did I say either are happening or look like happening? Did you even read my post?

Yep still doesn’t make sense

 

[red thru&thru]

Should not have to. Its complete bullshit. I was going to reply to that post, but I took a step back when I recognised it would take one or two hours off my life. It really should not be needed to be elaborated on.

Which is great for you but unfortunately, not everyone can understand this side of football, like you. So it helps when people like me understand the counter argument.

 

[red thru&thru]

Yep still doesn’t make sense

I'm more than happy to expand and explain but if you didn't understand the second time round, you surely didn't understand it the first time around. So your reply to my post earlier, is very peculiar.

 

[fergiesarmy1]

I'm more than happy to expand and explain but if you didn't understand the second time round, you surely didn't understand it the first time around. So your reply to my post earlier, is very peculiar.

Nah your ok and I’m not the only querying the peculiarity of your post by the looks of it so maybe you should take another look, you know just in case?

 

[red thru&thru]

Nah your ok and I’m not the only querying the peculiarity of your post by the looks of it so maybe you should take another look, you know just in case?

So out of thousands of posters, 2 query it and therefore I should look at it? Maybe not.

 

[seegoblu]

I hope this makes it easier to understand. If the company or its shareholders want to sell the shares they own, a registration statement (the filing made yesterday) needs to be filed and be declared effective with the local regulator (the SEC in the US). This type of registration statement (a shelf registration) does not relate to any specific shares (i.e., shares held by Avram or newly issued shares to be sold by Man Utd) but it is a prerequisite to either Man Utd or the Glazers selling some or all of their shares.

TL;DR the filing is pro forma and a ordinary filing for a publicly traded company in the US. It does not mean any shares will be sold, only that such shares CAN be sold.

 

[Sassy Colin]

Oh ok. Please do elaborate...

It's fine, if you want to believe a load of bollocks that someone has pulled out of their arse to suit their agenda.

 

[Johan07]

Which is great for you but unfortunately, not everyone can understand this side of football, like you. So it helps when people like me understand the counter argument.

To keep it short: The idea that the Glazers are trying to maximize the profit (by dividends) from United is illogical and not supported by evidence.
Not supported by evidence because of the fact that the Glazers has not taken any real dividends from United at all the first 10 years of ownership and minimally so after the IPO when they was forced to by the IPO itself. And when they do they lose out on 25 percent of it because of the equity is not their own anymore.
Illogical because it was never about dividends for the Glazers. It was always about a business plan that would drive up the asset value of United. And thats not done by finishing top-4 or top-6 or whatever. It can only be done by being one of the top clubs in the world.
The underperformance of our club the last couple of years is terrible for the Glazers business plan. The share value on the NYSE has not moved at all. Thats whats important to them. Not bleeding the club of dividends.
Which is also why we have spent a feckload of money on transfers and in particular on wages (which is what really is costly for the Glazers). That it has been spent badly is another matter completely and something I think most people can agree on.
Thats why that post is a lot of "tosh" like another poster stated perfectly correctly.

 

[red thru&thru]

It's fine, if you want to believe a load of bollocks that someone has pulled out of their arse to suit their agenda.

You've missed an earlier post I wrote but I said in that, it's great that you other guys understand the shares and financial side of the football, more than someone like me. So, when you say something is bullshit, it is nice for someone like me, to know why? What is the counter argument. That way, I could make my own decision it.

I'm sure I'm not alone in this and would help.

 

[red thru&thru]

To keep it short: The idea that the Glazers are trying to maximize the profit (by dividends) from United is illogical and not supported by evidence.
Not supported by evidence because of the fact that the Glazers has not taken any real dividends from United at all the first 10 years of ownership and minimally so after the IPO when they was forced to by the IPO itself. And when they do they lose out on 25 percent of it because of the equity is not their own anymore.
Illogical because it was never about dividends for the Glazers. It was always about a business plan that would drive up the asset value of United. And thats not done by finishing top-4 or top-6 or whatever. It can only be done by being one of the top clubs in the world.
The underperformance of our club the last couple of years is terrible for the Glazers business plan. The share value on the NYSE has not moved at all. Thats whats important to them. Not bleeding the club of dividends.
Which is also why we have spent a feckload of money on transfers and in particular on wages (which is what really is costly for the Glazers). That it has been spent badly is another matter completely and something I think most people can agree on.
Thats why that post is a lot of "tosh" like another poster stated perfectly correct.

Thanks for that Johan, appreciated. Like I said earlier, I don't have the vast knowledge on shares etc. So thanks again.

So after your explanation, it worries me even more, how much blind trust they have in Ed. He clearly has been failing at his remit, on the footballing side at least. How have they even allowed him to stay in the job for so long? Even more concerning.

 

[Sassy Colin]

You've missed an earlier post I wrote but I said in that, it's great that you other guys understand the shares and financial side of the football, more than someone like me. So, when you say something is bullshit, it is nice for someone like me, to know why? What is the counter argument. That way, I could make my own decision it.

I'm sure I'm not alone in this and would help.

Because he just made it up!

Read it again, it's complete fantasy.

 

[Catt]

Should not have to. Its complete bullshit. I was going to reply to that post, but I took a step back when I recognised it would take one or two hours off my life. It really should not be needed to be elaborated on.

I can't find the post you guys are talking about?

 

[red thru&thru]

I can't find the post you guys are talking about?

From my experience this is a classical corporate “have your cake and eat it too”!

Using a timeline it started in the summer 2018. I assume the owners gave the board instructions to;

a) reduce investments
b) cutting costs
c) shifting focus from increasing revenues to maximize profits

It all make sense.

In the summer 2018 we saw Woodward using the handbrake regarding buying new expensive players. He started to shifting high incomes against low or median incomes.

Mourinho (high) against Solksjaer (low median)
Lukaku and Sanchez (high) against James and Greenwood (low)
Fellaini and Herrera (median) against McTominay and Pereira (low)
Valencia, Darmian and Smalling (median) against Tuanzebe and Dalot (low)

Selling assets 2019

Lukaku
Fellaini

Maguire and AWB was a huge long term investments t but both are English and on relatively speaking median incomes. So that also make sense in this scenario. We need to blend young academy players with proven quality.

Next summer (2020) we will probably see the departure of Matic, Young and one of Jones/Rojo. All of them are on median incomes. It’s possible we sell Pogba (high income/huge asset) and reinvest some of it in younger players with low or median incomes.

Yesterday the owners opened the door to sell more shares. From my perspective that’s the next logical step if they want to “cash in”. We have already heard the rumors about a Saudi takeover. I assume more rumors will come.

We saw from last financial report that we estimate a lower turnover in 2020. The owners are scared that this will reduce the value of the club. That why we so dramatically lowering our costs in order to keeping our profits high. Typical behavior of defensive owners.

Shifting Mou against Ole was another indicator. From a vocal and controversial character to a loyal and diplomatic person who is (over) positive and can follow corporate instructions. On top of that a ex player and a legend who has the fan base behind him. Bingo!

Next crucial indicator will be how we handle Paul Pogba. Selling him and mission is completed.

 

[Catt]

Ah right, thanks @red thru&thru.

And thanks @Johan07 and @Raven for some sensible posts and explaining the financial side of the club in a straight forward way.

 

[RedCurry]

They might just be doing it for the laughs.



Cheers. I doubt they will clear the debt or fix the stadium at any point.

Oh I don't think they are trying to clear debt anytime soon.

But interest rates are going lower. It is not inconceivable that Glazers would sell their shares to raise money that they use to pay off the current debt which was financed during higher interest rate environment. They could potentially wait till the end of season where our share price will very likely be even lower than right now, and buy back their shares in open market using new debt at lower interest rates.

 

[Johan07]

Oh I don't think they are trying to clear debt anytime soon.

But interest rates are going lower. It is not inconceivable that Glazers would sell their shares to raise money that they use to pay off the current debt which was financed during higher interest rate environment. They could potentially wait till the end of season where our share price will very likely be even lower than right now, and buy back their shares in open market using new debt at lower interest rates.

I dont quite understand this post. But that the ownership might try to refinance soon might be a good bet; if that was the point.

 

[Nou_Camp99]

I don't understand how them selling off voting rights would be good for us? What kind of people do you think those shares word end up in the hands of anyway?

Well if they were selling off shares WITH decent voting rights then we'd be closer to a sale than without.

What's difficult to grasp about this? I don't want the Glazers at this club any longer. I'd dance on the twats grave if given the chance. Twice.

 

[RedCurry]

I dont quite understand this post. But that the ownership might try to refinance soon might be a good bet; if that was the point.

Refinancing their debt using funds from sale of equity as an intermediate step, was my point.

 

[TheRedHearted]

Seems like they're slowly making an exit. It's only a matter of time before someone makes an offer for the club.

I can't imagine the club being traded solely as a plc for long if they give up their majority stake.

I originally thought that but doing so would most likely be a poor choice in terms of selling.

Most likely an investor would want as much equity as possible. If the voting stays with the majority that the glazers still own, then I suppose it could make more sense but normally more of the pie that an investor can get the better (considering how large of an investment it would be to own Manchester United).


Also it’s great to point out that our last three signings are of our smartest in the last 3-4 of a decade. Patience is needed but if we sign three more players of that caliber and then two superstars we are back in business. That could take a year and a half

 

[ATXRedDevil]

Hadn't seen a thread on this. It's a long document but expecting an article or two covering the basics shortly:

https://www.sec.gov/Archives/edgar/...239741zposam.htm#dg48002_selling_shareholders

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I'm a corporate lawyer. This (drafting documents like the one you linked) is what I do. This is a shelf registration statement. It registers shares for future sales. It does not necessarily mean they are doing an offering of those shares. It just means they're registered for future sales. Further, this is a post-effective amendment to an already filed registration statement. The original registration statement was a automatic shelf registration statement that is effective upon filing. Only well-known seasoned issuers (WKSI) can put those up. If you read the Explanatory Note, the company has lost it's WKSI status and thus can no longer use an automatic shelf registration statement. Non-WKSI's have to put up non-automatic shelfs that require the SEC to declare the registration statement effective. This post-effective amendment is to convert the WKSI shelf (that was filed in September 2018) to a non-WKSI shelf. I've done this process for my clients - you file a POSASR, file your annual report, and then file a POSAM to convert the registration statement from a WKSI shelf to a non-WKSI shelf.

Again, does not mean they're doing an offering. Just means they've converted the shelf they can no longer use because of the loss of WKSI status to a shelf they can use (a regular F-3 instead of an F-3ASR).

 

[ATXRedDevil]

I hope this makes it easier to understand. If the company or its shareholders want to sell the shares they own, a registration statement (the filing made yesterday) needs to be filed and be declared effective with the local regulator (the SEC in the US). This type of registration statement (a shelf registration) does not relate to any specific shares (i.e., shares held by Avram or newly issued shares to be sold by Man Utd) but it is a prerequisite to either Man Utd or the Glazers selling some or all of their shares.

TL;DR the filing is pro forma and a ordinary filing for a publicly traded company in the US. It does not mean any shares will be sold, only that such shares CAN be sold.

True in some respects, but as noted above, it's not an "ordinary filing for a a publicly traded company in the US." The POSASR and POSAMs are only filed in this fact pattern when the registrant loses WKSI status (which the company did upon filing of it's 20-F annual report).

 

[red thru&thru]

So @ATXRedDevil it seems like you have some experience in this type of thing happening...have you an opinion on the ownership of the club? I mean by all accounts, we're probably not performing how the Glazer's would like, do any signs suggest that Glazer's could be looking for a sale?

 

[Johan07]

I'm a corporate lawyer. This (drafting documents like the one you linked) is what I do. This is a shelf registration statement. It registers shares for future sales. It does not necessarily mean they are doing an offering of those shares. It just means they're registered for future sales. Further, this is a post-effective amendment to an already filed registration statement. The original registration statement was a automatic shelf registration statement that is effective upon filing. Only well-known seasoned issuers (WKSI) can put those up. If you read the Explanatory Note, the company has lost it's WKSI status and thus can no longer use an automatic shelf registration statement. Non-WKSI's have to put up non-automatic shelfs that require the SEC to declare the registration statement effective. This post-effective amendment is to convert the WKSI shelf (that was filed in September 2018) to a non-WKSI shelf. I've done this process for my clients - you file a POSASR, file your annual report, and then file a POSAM to convert the registration statement from a WKSI shelf to a non-WKSI shelf.

Again, does not mean they're doing an offering. Just means they've converted the shelf they can no longer use because of the loss of WKSI status to a shelf they can use (a regular F-3 instead of an F-3ASR).

Thanks. Excellent and well explained post.

 

[ATXRedDevil]

So @ATXRedDevil it seems like you have some experience in this type of thing happening...have you an opinion on the ownership of the club? I mean by all accounts, we're probably not performing how the Glazer's would like, do any signs suggest that Glazer's could be looking for a sale?

No, in my opinion this has zero indication of whether they're looking for a sale. All this means is that they're taking the necessary actions to be able to use the shelf they already had up if they wanted to do an offering of any of the securities registered thereon (which, by the way, includes debt securities, warrants, purchase contracts, units and class A shares (all primary - meaning sold by the company), and secondary class A shares (meaning sold by the selling shareholders - who are not identified in the registration statement and have to be identified in a prospectus supplement for a specific offering)).

When I have done this, it's because my client had a contractual obligation to maintain an effective shelf that registered the secondary shares owned by some of its owners. I'm not saying the club has that obligation (though there may be a registration rights agreement whereby the club has an obligation to do the same for certain of the owners). This is pretty standard practice for filers that lose WKSI status. You have a shelf up for a reason - to be ready and able to do an offering whenever the need arises. When you lose WKSI status and lose the ability to use that shelf, it makes sense to file these amendments to convert the old shelf to a useable non-WKSI shelf rather than having to file a whole new non-automatic shelf.

This is just good corporate practice and not at all indicative of an upcoming offering (which again, could be of any of the type of securities registered on the shelf, not just class A shares owned by the Glazers).

Sorry to burst anyone's bubble - I know the vast majority of us would like them out...

 

[DSG]

As usual in the Caf, there are a lot of comments by members who don’t really understand asset management, share classes and share issuance requirements.

1. The filing is a just a matter of course, you do this to increase flexibility. They may not even float the shares on the market, it just gives them the option to do so.

2. If you are selling the club, you would be selling the voting shares, so diluting the pool of voting shares wouldn’t make any sense. This filing has nothing to do with selling the club.

3. Almost every large, performing asset is purchased through some sort of financing. What the Glazers did is not really that unusual in the world of finance. They most likely work with a bunch of Harvard trained Goldman Sachs consultants who give them 7 options for maximizing asset value, then they choose a course of action.

4. Most PL teams are operated as assets, not family run businesses. Large multinationals and hedge funds are major shareholders in most of the clubs. Most of the owners are not “football men”. The difference is that some of the clubs have put in healthy structures and oranganizations below the owners, we are still struggling to do that.

Back to the football....

 

[red thru&thru]

No, in my opinion this has zero indication of whether they're looking for a sale. All this means is that they're taking the necessary actions to be able to use the shelf they already had up if they wanted to do an offering of any of the securities registered thereon (which, by the way, includes debt securities, warrants, purchase contracts, units and class A shares (all primary - meaning sold by the company), and secondary class A shares (meaning sold by the selling shareholders - who are not identified in the registration statement and have to be identified in a prospectus supplement for a specific offering)).

When I have done this, it's because my client had a contractual obligation to maintain an effective shelf that registered the secondary shares owned by some of its owners. I'm not saying the club has that obligation (though there may be a registration rights agreement whereby the club has an obligation to do the same for certain of the owners). This is pretty standard practice for filers that lose WKSI status. You have a shelf up for a reason - to be ready and able to do an offering whenever the need arises. When you lose WKSI status and lose the ability to use that shelf, it makes sense to file these amendments to convert the old shelf to a useable non-WKSI shelf rather than having to file a whole new non-automatic shelf.

This is just good corporate practice and not at all indicative of an upcoming offering (which again, could be of any of the type of securities registered on the shelf, not just class A shares owned by the Glazers).

Sorry to burst anyone's bubble - I know the vast majority of us would like them out...

You've certainly just burst mine! Hahaha.

But thank you and I really appreciate your reply. It's great to learn new things, especially by someone who actually does this as a day job.

 

[Johan07]

No, in my opinion this has zero indication of whether they're looking for a sale. All this means is that they're taking the necessary actions to be able to use the shelf they already had up if they wanted to do an offering of any of the securities registered thereon (which, by the way, includes debt securities, warrants, purchase contracts, units and class A shares (all primary - meaning sold by the company), and secondary class A shares (meaning sold by the selling shareholders - who are not identified in the registration statement and have to be identified in a prospectus for a specific offering)).

When I have done this, it's because my client had a contractual obligation to maintain an effective shelf that registered the secondary shares owned by some of its owners. I'm not saying the club has that obligation (though there may be a registration rights agreement whereby the club has an obligation to do the same for certain of the owners). This is pretty standard practice for filers that lose WKSI status. You have a shelf up for a reason - to be ready and able to do an offering whenever the need arises. When you lose WKSI status and lose the ability to use that shelf, it makes sense to file these amendments to convert the old shelf to a useable non-WKSI shelf rather than having to file a whole new non-automatic shelf.

This is just good corporate practice and not at all indicative of an upcoming offering (which again, could be of any of the type of securities registered on the shelf, not just class A shares owned by the Glazers).

Sorry to burst anyone's bubble - I know the vast majority of us would like them out...

To start with your input is extremely helpful. I am a Swedish corporate lawyer but I would not pretend to know Cayman Island law or NYSE regulations other than on a very basic level.
Would you agree though that this filing would enable (easier) some of the Glazer siblings to exit their holdings though?. Because that was my first reaction to it.
We obviously dont know the contents of of the Shareholders Agreement that exists between by the Glazers. But if you would file something similar in Sweden or the EU I would dare state, its a sign of some of the owners looking to exit. Or at least making it a possibility.

 

[MrPooni]

No, in my opinion this has zero indication of whether they're looking for a sale. All this means is that they're taking the necessary actions to be able to use the shelf they already had up if they wanted to do an offering of any of the securities registered thereon (which, by the way, includes debt securities, warrants, purchase contracts, units and class A shares (all primary - meaning sold by the company), and secondary class A shares (meaning sold by the selling shareholders - who are not identified in the registration statement and have to be identified in a prospectus supplement for a specific offering)).

When I have done this, it's because my client had a contractual obligation to maintain an effective shelf that registered the secondary shares owned by some of its owners. I'm not saying the club has that obligation (though there may be a registration rights agreement whereby the club has an obligation to do the same for certain of the owners). This is pretty standard practice for filers that lose WKSI status. You have a shelf up for a reason - to be ready and able to do an offering whenever the need arises. When you lose WKSI status and lose the ability to use that shelf, it makes sense to file these amendments to convert the old shelf to a useable non-WKSI shelf rather than having to file a whole new non-automatic shelf.

This is just good corporate practice and not at all indicative of an upcoming offering (which again, could be of any of the type of securities registered on the shelf, not just class A shares owned by the Glazers).

Sorry to burst anyone's bubble - I know the vast majority of us would like them out...

Finally someone cuts through all the uninformed bollocks. Genuinely appreciate you taking the time to put this out there.

 

[ATXRedDevil]

To start with your input is extremely helpful. I am a Swedish corporate lawyer but I would not pretend to know Cayman Island law or NYSE regulations other than on a very basic level.
Would you agree though that this filing would enable (easier) some of the Glazer siblings to exit their holdings though?. Because that was my first reaction to it.
We obviously dont know the contents of of the Shareholders Agreement that exists between by the Glazers. But if you would file something similar in Sweden or the EU I would dare state, its a sign of some of the owners looking to exit. Or at least making it a possibility.

It certainly facilitates the sales and is necessary to do them. But doesn’t necessarily mean that they will.

It should be noted that the original registration statement was filed a year ago, so they’ve had the ability to conduct offering on this registration statement for a year.

As a practical matter, we counsel our public clients to always have a shelf registration statement up (or, if a new public company, to put one up as soon as you get WKSI status - which requires a public float of $700m and two years of reporting history with the SEC). If you’re going to file one, you may as well register secondary shares. The shelf is a universal shelf, meaning it registers a wide range of securities. It’s all about be ready for if and when you want to conduct an offering, and a well run public entity should always have a shelf registration statement up in order to be able to access the public capital markets if needed.

for perspective, I’m in the middle of drafting an S-3ASR ( a WKSI shelf for a non-foreign entity; united’s Original shelf was an F-3ASR - the equivalent for a foreign entity). (By the way, by foreign I don’t mean they’re not an American company, won’t get into all that). This client has no plans to do an offering anytime soon and we are registering secondary shares for no particular stockholder whatsoever - just to have the flexibility to do a secondary offering off the shelf if they want to. You can identify secondary shareholders in the prospectus supplement for the particular offering, but if you don’t register secondary shares, you’d have to amend the registration statement first (or, if a WKSI, file a 424(b)(7) to add them).

So this isn’t an indication of anything. It’s just good corporate practice to maintain an active shelf, and if you’re going to have an active shelf, you may as well make sure you can do any and all type of offerings you could possibly want to do off that shelf (whether it be debt, warrants, primary shares or secondary shares).