A top Manchester United shareholder said he was in the dark over the Premier League football club’s future, as the Glazer family continued talks with British chemicals tycoon Jim Ratcliffe over potential investment.
Nick Train said discussions over a deal had been an “extraordinarily convoluted and lengthy process”, almost one year since the Glazers said they would consider new investment into the club, a sale or other transactions.
One of the UK’s best-known fund managers confessed he was “not a Man United fan” when interviewed on the Financial Times’s Money Clinic podcast, but said he had high hopes for a deal boosting prospects for investors in his two flagship UK equity funds, which have been underperforming the wider UK market in recent years.
Mr Ratcliffe and his Ineos chemicals group are closing in on an agreement under which they would own roughly 25 per cent of United, according to people with knowledge of the matter. The Glazers would retain majority control in that scenario.
Mr Ratcliffe’s deal is set to value United at $6 billion (€5.6 billion) to $6.5 billion, including debt, it has been previously reported. The transaction would allow the Glazers and other shareholders to sell down their stakes and also enable Mr Ratcliffe to inject fresh funds into United.
“I’ve got to assume that we’re closer to some sort of an announcement or crystallisation of value but who knows when or quite what shape it will take if the rumours are correct,” said Mr Train, co-founder of fund group Lindsell Train. “I’ve no basis for knowing if they are or not.”
There is no guarantee that a deal will go ahead. Qatar’s Sheikh Jassim bin Hamad al-Thani withdrew from the bidding last month.
The deal is a test of investor appetite for sports as institutional capital sends valuations higher. US investors Clearlake Capital and Todd Boehly bought Premier League side Chelsea FC for £2.5 billion (€2.8 billion) last year, still the biggest price paid for a football club. In the US, private equity titan Josh Harris led the $6 billion acquisition of the Washington Commanders NFL franchise this year.
United’s dual-class share structure has added complexity to the talks, posing risks to minority investors such as Lindsell Train. Mr Ratcliffe reformulated his proposal after board concerns about an earlier iteration that would have entailed buying shares only from the Glazers rather than minority shareholders.
The Glazers control the company through supervoting B shares, which do not trade on the open market. Lindsell Train owns more than 20 per cent of the A shares but has less than 1 per cent of total voting rights.
“If the rumours are correct ... the asset is worth more than £5 billion,” Train said. “It would be wonderful if our investors end up seeing that value accorded to the shares that we own on their behalf.”
Manchester United declined to comment. Its shares hit a high of $27.34 in February, as expectations soared of a Qatari takeover.
Not every sports-related sector has Mr Train’s approval, however, as he struck a note of caution on the rise in betting. More people should “take a flutter on the stock market than take a punt on the outcome of a football match”, he said.
“You can be more certain about investing in Diageo than the number of corners in a football match,” he said, stressing the need to educate young people about the value of long-term investing.
Mr Train also defended the recent poor performance of his two flagship UK equity funds, Lindsell Train UK Equity and Finsbury Growth & Income Trust, urging investors to be patient and noting the rising number of US investors such as Microsoft and Berkshire Hathaway who are taking positions in unloved FTSE 100 companies. – Copyright The Financial Times Limited 2023
