NEWS ROUND-UP:THE GLAZER family, under pressure from fans protesting at their leveraged financial model, last night insisted Manchester United were "not for sale" after it emerged a group of influential City of London figures known as the Red Knights had met to consider a bid for the club.
Sources close to the talks said the discussions, although in their early stages, were serious in their intent. Sky News last night reported Jim O’Neill, chief economist at Goldman Sachs, was planning to lead the group.
He yesterday met with other powerful City figures interested in exploring the possibility of bidding for the club, which is carrying debts of €793 million if the high interest hedge fund loans secured by the Glazers on their stake in the club are added to the €558 million bond raised last month.
Others at yesterday’s meeting include Mike Rawlinson, a partner at City of London law firm Freshfields who advised United on their takeover by the Glazers in 2005, and Keith Harris, the Seymour Pierce stockbroker who has been outspoken in his criticism of the American owners.
Other City figures, including Paul Marshall, a partner at the hedge fund Marshall Wace, are supporting the Red Knights. Richard Hytner, the deputy chairman of global advertising agency Saatchi Saatchi, is also involved.
The talks grew out of earlier attempts by Manchester United supporters to engage wealthy fans in the possibility of a buyout scheme that would slowly morph into a collective ownership model over time.
But the discussions have become more serious after the full extent of the Glazers’s borrowings, and the amount they intend to take out of the club over the next seven years to pay down their own high interest loans, has become clear.
The 322-page prospectus that was issued to encourage take-up of the bond issue revealed the Glazers could potentially take almost €144 million cash out of the club next year alone.
That huge figure is in addition to the straightforward payment of interest (yield) on the €558 million bond of around €53 million. That will bring the total taken out of United to service the Glazers’s borrowings, which were loaded on to the club after the family bought the club in 2005, to €191 million next year alone. Although it laid bare their business model, and the money that would flow out of the club rather than being invested in players and facilities, in many ways the successful bond issue has strengthened the Glazers’s hand.
Their spokesman was last night unequivocal: “Manchester United is not for a sale. It’s business as usual.”
Andy Green, an investment professional and United supporter who wrote a challenging open letter to Manchester United chief executive David Gill last week under his blogging name Andersred, said last week: “There is a very serious process going on in the City, with inv’estors looking at a structure in which fans can develop as significant a stake as possible. Key will be persuading the Glazers to sell.”
Keith Harris, the merchant banker and United supporter who is working with the Red Knights, last week called on supporters backing the green and gold protests to begin boycotting the club.
United sources believe the news about the meeting may have been leaked for maximum impact. Figures released yesterday by Deloitte will show United has been overtaken by Barcelona, slipping to third in the list of the world’s biggest revenue generators.
Gill will tomorrow give his first public defence of the refinancing at the Soccerex conference in Manchester. In his only interview on the subject since the bond was issued, he has backed the Glazers to the hilt. “From my own personal perspective, we have no doubt that they [the Glazers] would support whatever we require. They will only get value back by ensuring the team continues to be successful, continues to attract exciting players and continues to produce results off the pitch,” he said.
GuardianService
