Club Sale | It’s done!

[Woziak]

I don't deny it. I don't know, but even if he lied about absolutely everything, is a Liverpool fan and lives with his mum.. He's still asked questions around the feasibility of Partial Investment that I haven't seen answered.

I've asked similar questions on here for months and nobody has an intelligent answer.

His answer is not intelligent either why would a VC spend £2.4-2.6bn on buying out the other 4 Siblings to have those B Shares demoted to A shares which are 1/10th the value. As I’ve explained if Carlyle did this because Elliot would not entertain the concept, those £2.6bn of funds invested would automatically be worth with the new agreement he mentions 25% of voting shares compared to 75% of. The other two glazers.

So instantly valuing their £2.6bn investment at 25% of 69% of £4bn after the shares crash with news of the Glazers staying and thought of increased debt which is …,wait for it £690m that’s a depreciation of nearly £2bn with the hope in 7 years of the club being sold for £10bn which means that £690m would be worth £1.725bn they still lose £875m, this only works if they have a 49% minority state of voting shares then and only then would their £2.6bn investment be worth £3.380bn or a profit of £780m over 7 years which only represents a ROI of 4.3% that at least is feasible but 25% of voting shares. For £2.4-2.6bm is complete hogwash !!

 

[Zed 101]

The other thing, is if some of the Glazer's were bought out by whomever, this money would leave the business, not remain it if for re-investment or be available to the remaining Glazers.... So there would still need to be significant investment in infrastructure, players, consolidating or clearing existing debts, so somewhere in the region of a further £2bn,

Therefore the theoretical proposal is that investors would be willing to pay £2.6bn to buy a non-controlling share in a company which is being currently mismanaged to the point it will go bankrupt if something does not change, and invest a further £2bn just for shits and giggles, so a total of £4.6bn, when the theoretically could purchase the entire club and get rid of the useless Glazers for somewhere in the region of £6bn

Makes perfect sense..... not

 

[Roboc7]

For all the criticism the Glazers get, and much of it is valid, they have never made screw ups of the size that Boehly has at Chelsea. £600m spent on players inside of 8 months owning the club (destroying a decent platform built up during the Tuchel era) instead of patiently building after careful assessments with guidance from experts. What he's done is astonishing and makes the Glazers look like geniuses.

It's also a stark lesson that sometimes it's better to stick with the devil you know than the devil you don't.

If you look at what the Glazers have done to Utd on and off the pitch it’s gross incompetence and neglect. It’s just a slow painful death whereas Boehly might crash and burn quickly.

If going to have bad owners I’d rather they just make a mess and get out the door quickly, as we see people are willing to buy Utd just as people will be willing to buy Chelsea if Boehly doesn’t sort himself out.

 

[Trophy Room]

Awful news.

 

[devilish]

So basically Carlyle will be buying the majority of shares for barely any say whatsoever. These shares are also pretty much worthless as prospective owners wouldn't need to buy them to get control over the club.

 

[jm99]

So basically Carlyle will be buying the majority of shares for barely any say whatsoever. These shares are also pretty much worthless as prospective owners wouldn't need to buy them to get control over the club.

They actually would, because if prospective owners bought Joel and avi's shares, they would convert to class A shares as well, making whoever bought them a minority if carlyle held the rest. I don't think it will actually happen but that wouldn't be a deterrent

 

[MegadrivePerson]

For all the criticism the Glazers get, and much of it is valid, they have never made screw ups of the size that Boehly has at Chelsea. £600m spent on players inside of 8 months owning the club (destroying a decent platform built up during the Tuchel era) instead of patiently building after careful assessments with guidance from experts. What he's done is astonishing and makes the Glazers look like geniuses.

It's also a stark lesson that sometimes it's better to stick with the devil you know than the devil you don't.

True.

If mad Todd had taken over here and sacked ETH, replaced him with Potter then replaced him with Solskjaer and we were languising in 11th place I don't think anybody would be happy!

It's worth pointing out that Chelsea are an extreme worst case scenario though and I don't think any of the prospective buyers will be as crazy as Chelsea over the last 12 months!

 

[devilish]

They actually would, because if prospective owners bought Joel and avi's shares, they would convert to class A shares as well, making whoever bought them a minority if carlyle held the rest. I don't think it will actually happen but that wouldn't be a deterrent

Unless Avi and Joel decide to change the rule of the game. Don't forget that they still have 70+% of the club's control. Irrespective of that its crazy. I can't see how anyone would be willing to buy the majority of shares and still have little to no say on how it is run. To the very least these shares will lose some of their value which leads to the question....why on earth would the four orcs agree to have their shares worth devalued and therefore sold for a cheaper price? Do they love Avi and Joel so much to be willing to lose money?

 

[Marcelinho87]

You can't borrow at 4% right now in the UK though, can you? 10-year Gilts are trading at 3.84%. No idea what the credit rating is on presumably a secured loan for construction, but the spread would be at least 100 bps if not 200+ bps.

Who knows.

These lot aren't nipping in to Halifax or scrolling Tesco bank.. these are circles which we will never be privy to.

A loan to us at 8 or 9 percent is a damn sight less than billions to these geezers at 3 or 4 percent.

 

[jm99]

Unless Avi and Joel decide to change the rule of the game. Don't forget that they still have 70+% of the club's control. Irrespective of that its crazy. I can't see how anyone would be willing to buy the majority of shares and still have little to no say on how it is run.

Yeah I dont see it happening either, the others siblings selling doesn't raise any money for the club because they'd take it and run, buying a minority stake likely means buying at the share price rather than the hugely inflated price that Ratcliffe and jassim are offering, so why would the other siblings agree to take less? They need massive on field investment and infrastructure investment, and apparently we're already close to a billion in debt, it's just hard to see how they can try to stay on

 

[mu4c_20le]

Two clueless folk talking nonsense to each other.

 

[Roboc7]

So basically Carlyle will be buying the majority of shares for barely any say whatsoever. These shares are also pretty much worthless as prospective owners wouldn't need to buy them to get control over the club.

It’s the same issue with any version of a minority investment that gets suggested, it’s always a bad deal for anyone one other than Joel or Avram and no money goes to the club so all the same issues remain.

For them to stay they’d need to agree to convert and then sell off some of their shares which they could have just done without going through this whole process. The funds could go into the club to stabilise the club and that’s about it.

 

[LawCharltonBest]

Two clueless folk talking nonsense to each other.

They always get that Kieran Maguire guy in to talk about financial things but he seems to chat a load of nonsense and nothing he ever says seems to be close to what actually happens.

 

[devilish]

It’s the same issue with any version of a minority investment that gets suggested, it’s always a bad deal for anyone one other than Joel or Avram and no money goes to the club so all the same issues remain.

For them to stay they’d need to agree to convert and then sell off some of their shares which they could have just done without going through this whole process. The funds could go into the club to stabilise the club and that’s about it.

I disagree. If the business in question is a cash cow, the owners that are running is the reason why it is doing so well and they are only willing to sell a minority stake then it makes sense to get a piece of that even if its a minority stake. United is not that type of business. The owners are running it to the ground, they are hated by their own clients and while the club's value had increased throughout the years its down to the EPL's growth rather then their expertise. Buying a minority stake in a business that has been losing money for 3 years is pure lunacy especially in such circumstances (ie the buyer is spending top dosh for the majority of shares only to end up with nearly zero say). For all we know the Glazers might decide not to issue dividends which means that Carlyle would be investing 2-3B only to get nothing out of it whatsoever.

 

[Giggsyking]

Good tweet by Kieran. Demonstrates that stadium improvements pay for themselves. Bear in mind that would apply to INEOS too (On their books of course)

It is not true. First there is no chance the Glazers gets 4.0% interest rate on their loan while the club is in huge debt already. Secondly, a new stadium will cost something near 2B . Refurbishment around 1B, if you include the Carrington redevelopment and the academy development we are talking about 1.5B here. We are not going to generate enough money to cover this gigantic cost.

 

[Roboc7]

I disagree. If the business in question is a cash cow, the owners that are running is the reason why it is doing so well and they are only willing to sell a minority stake then it makes sense to get a piece of that even if its a minority stake. United is not that type of business. The owners are running it to the ground, they are hated by their own clients and while the club's value had increased throughout the years its down to the EPL's growth rather then their expertise. Buying a minority stake in a business that has been losing money for 3 years is pure lunacy especially in such circumstances. For all we know the Glazers might decide not to issue dividends which means that Carlyle would be investing 2-3B only to get nothing out of it whatsoever.

What I mean is they would just do what they have done previously and list shares on the NYSE. Each give up a very small percentage (maybe Joel and Avram the most) to raise 400m or so just to refinance essentially.

I agree that it doesn’t make sense for any investor to buy a large chunk of shares and then allow the same idiots who’ve caused all the problems to carry on doing the same thing.

 

[MoskvaRed]

Who knows.

These lot aren't nipping in to Halifax or scrolling Tesco bank.. these are circles which we will never be privy to.

A loan to us at 8 or 9 percent is a damn sight less than billions to these geezers at 3 or 4 percent.

No chance - the UK government is paying nearly 4% at the moment to raise 10 year debt.

 

[Plant0x84]

Two clueless folk talking nonsense to each other.

Yes. Football finance expert, Kieran Maguire, ‘clueless’. Ironic.

A chartered accountant who has been involved in financial education since 1989, Maguire is Senior Teacher in Accounting and Finance at the University of Liverpool Management School, where he teaches the Football Industries MBA. He specialises in financial reporting, financial modelling and football finance.[14] Whilst at Manchester Metropolitan University in 2011, Maguire was awarded Best UK Accountancy Lecturer. He had also been named the 2010 Lecturer of the Year by students at the University. In addition, Maguire won the Innovation in Teaching and Learning Prize 2010 for his developments in student learning.

 

[Sir Erik ten Hag]

For all the criticism the Glazers get, and much of it is valid, they have never made screw ups of the size that Boehly has at Chelsea. £600m spent on players inside of 8 months owning the club (destroying a decent platform built up during the Tuchel era) instead of patiently building after careful assessments with guidance from experts. What he's done is astonishing and makes the Glazers look like geniuses.

It's also a stark lesson that sometimes it's better to stick with the devil you know than the devil you don't.

It's like saying death by cancer is better than death by a car accident.
The Glazers will destroy our club overtime. No doubt about it.

 

[Adisa]

Who is giving you money at 4% in this market?

Who knows.

These lot aren't nipping in to Halifax or scrolling Tesco bank.. these are circles which we will never be privy to.

A loan to us at 8 or 9 percent is a damn sight less than billions to these geezers at 3 or 4 percent.

They are not getting 4% from anywhere. Rates are only going one way.
A PE firm will even want more.

 

[Plant0x84]

A footballer and an economist, talking about football economics. And then there’s you.

Indeed!

 

[Mr. Robot]

2-3 years back, reddevil subreddit (on reddit) had this daily conversation post which allowed so called ITK to come and post. Obviously all of them were fake and it became so bad that some of the users started doxxing these ITK’s. Then this was banned from that subreddit and few users banded together and formed the “Muppetiers” on reddit, taking the same ITK users. They had to close their subreddit 2-3 times because of user backlash because most of their so called inside information turned out to be false.

So yeah these people are clueless and just digest news that we all have access to, and then post something cryptic. If it turns out true, they will claim they knew about it, if it doesn’t, then they wont bother bringing it up. They have recently became smarter in how they post so that there is no backlash in case they are wrong.

@Berbaclass What do you have to say about this?


And you can call me Boomer, it’s fine. But I would rather be a Boomer who prefers real journalism over teenagers who still live with their parents. I would actually believe Terry fecking Flewers before I trust anything the Muppet Babies have to say.

 

[Plant0x84]

You can't borrow at 4% right now in the UK though, can you? 10-year Gilts are trading at 3.84%. No idea what the credit rating is on presumably a secured loan for construction, but the spread would be at least 100 bps if not 200+ bps.

The finance is very unlikely to be uk based.

 

[devilish]

What I mean is they would just do what they have done previously and list shares on the NYSE. Each give up a very small percentage (maybe Joel and Avram the most) to raise 400m or so just to refinance essentially.

I agree that it doesn’t make sense for any investor to buy a large chunk of shares and then allow the same idiots who’ve caused all the problems to carry on doing the same thing.

We're not talking about selling small chunks of shares on the stock exchange to pocket some pocket money to buy the next mansion or super yacht. 4 out of 6 siblings wants out and their shares represent the majority ownership of the club. Control over that club is what constitute most of those shares worth. In fact SJR and Jassim are willing to go way beyond market share value to buy them up.

For this to work then one of the two will need to apply

a- the 4 siblings are willing to sell their shares way below to what Jassim and SJR are willing to offer them.
b- There's a private equity out there who is stupid enough to buy these shares at least at the same price that Jassim/SJR would buy them while accepting to have a zero say on how the club is run.

B is quite dangerous because these private equities would basically be giving loads of money to someone who has little to no restrictions whatsoever (since they have 70%+ of control). Basically Avi/Joel might

a- stop dividends for 10 years. Thus Carlyle would be investing 2-3B and get nothing in return
b- Avi/Joel can change the rules so that their class B shares would retain their control power even after the Glazers had sold them. Thus their shares will increase their value (someone like SJR could take control over the club by just buying them) while reducing the worth of the class A shares.

 

[dove]

Who is giving you money at 4% in this market?

Yea, seems like that Maguire fella has been living in some cave for the past year or so. No way you can borrow anything with 4% rate at the current time.

 

[Plant0x84]

For all the criticism the Glazers get, and much of it is valid, they have never made screw ups of the size that Boehly has at Chelsea. £600m spent on players inside of 8 months owning the club (destroying a decent platform built up during the Tuchel era) instead of patiently building after careful assessments with guidance from experts. What he's done is astonishing and makes the Glazers look like geniuses.

It's also a stark lesson that sometimes it's better to stick with the devil you know than the devil you don't.

Careful WUM, you’re outting yourself again!
Also you’re wrong. Pogba, Di Maria and Lukaku are just 3 off the top of my head. Our transfer business has been appalling under Woodward and the Glazers for 17 years.

 

[devilish]

@Berbaclass What do you have to say about this?

Can we finally ensure that the Muppetiers (I mean, come on - fecking MUPPETIERS?!) are not allowed as a source for anything here other than LOLs?

And you can call me Boomer, it’s fine. But I would rather be a Boomer who prefers real journalism over teenagers who still live with their parents.

In that case we might ban all the information coming from journalists who fecked up through the years starting from those who claimed that SJR and Jassim had placed a bid on deadline day when it wasn't the case. That would probably leave us with just Howard Nurse whose inside information is probably telling him that we'll soon be bought by Louis Edwards.

 

[MoskvaRed]

The finance is very unlikely to be uk based.

The stadium construction cost will be in GBP. Therefore you would borrow GBP.. 4% is a fantasy for a leveraged business like United in a volatile sector like premier league football.

 

[Telsim]

Who is giving you money at 4% in this market?

They are not getting 4% from anywhere. Rates are only going one way.
A PE firm will even want more.

Yea, seems like that Maguire fella has been living in some cave for the past year or so. No way you can borrow anything with 4% rate at the current time.

Manchester United is a global business with good credit rep and loads of collateral. Put the stadium and/or the land around it and it's not at all impossible to workout a long term loan on preferential interest. Goes without saying the club will be instantly annihilated if it goes tits up.

 

[Roboc7]

We're not talking about selling small chunks of shares on the stock exchange to pocket some pocket money to buy the next mansion or super yacht. 4 out of 6 siblings wants out and their shares represent the majority ownership of the club. Control over that club is what constitute most of those shares worth. In fact SJR and Jassim are willing to go way beyond market share value to buy them up.

For this to work then one of the two will need to apply

a- the 4 siblings are willing to sell their shares way below to what Jassim and SJR are willing to offer them.
b- There's a private equity out there who is stupid enough to buy these shares at least at the same price that Jassim/SJR would buy them while accepting to have a zero say on how the club is run.

B is quite dangerous because these private equities would basically be giving loads of money to someone who has little to no restrictions whatsoever (since they have 70%+ of control). Basically Avi/Joel might

a- stop dividends for 10 years. Thus Carlyle would be investing 2-3B and get nothing in return
b- Avi/Joel can change the rules so that their class B shares would retain their control power even after the Glazers had sold them. Thus their shares will increase their value (someone like SJR could take control over the club by just buying them) while reducing the worth of the class A shares.

You’re missing the point I am just pointing out a plausible scenario. They club together sell off some shares to whoever, ease their financial issues by refinancing some of the debt and then revisit a sale when they think it’s worth more.

That allows the status quo to continue, it ticks all the boxes as long as the siblings are happy to postpone a sale in the short term. All these other scenarios like preferred shares or someone buying shares with no control make no sense. Even the idea they would ever redevelop the stadium or build a new one is total pie in the sky.

Like I said initially they wouldn’t have needed to go through this process to do that, unless this was just a fishing exercise which would seem unlikely but again is plausible.

 

[ShinjiNinja26]

Why would the rest of the siblings agree to minority investment when they stand to earn far more for their shares with a full sale? the difference in what they’ll receive from a minority stake and a full sale is massive.

 

[jm99]

You’re missing the point I am just pointing out a plausible scenario. They club together sell off some shares to whoever, ease their financial issues by refinancing some of the debt and then revisit a sale when they think it’s worth more.

That allows the status quo to continue, it ticks all the boxes as long as the siblings are happy to postpone a sale in the short term. All these other scenarios like preferred shares or someone buying shares with no control make no sense. Even the idea they would ever redevelop the stadium or build a new one is total pie in the sky.

Like I said initially they wouldn’t have needed to go through this process to do that, unless this was just a fishing exercise which would seem unlikely but again is plausible.

But who's going to buy 400m of newly issued shares in a stock who's share price is plummeting based on the Glazers staying, knowing that their purchase will enable the Glazers to stay? To also have absolutely zero say in what happens. Not yo mention if the other siblings want out, the offers for a full sale represent almost a billion each. The returns they could get with that amount of liquid cash is way higher than what they could get by holding onto the club for another few years

 

[Roboc7]

But who's going to buy 400m of newly issued shares in a stock who's share price is plummeting based on the Glazers staying, knowing that their purchase will enable the Glazers to stay? To also have absolutely zero say in what happens. Not yo mention if the other siblings want out, the offers for a full sale represent almost a billion each. The returns they could get with that amount of liquid cash is way higher than what they could get by holding onto the club for another few years

They just go on the stock exchange like they have done previously, no differently to when they have been sold before. The has no trouble selling them in the past and won’t have any now or in near future.

What everyone forgets is this isn’t just business it’s family politics as well. The six of them have to reach some sort of common ground, none of them can break rank of their shares change class and are devalued.

If Joel and Avram don’t want to sell then there is no sale full stop. From what we hear they don’t really want to sell and the other 4 do so one side is going to either have to relent or they compromise somehow.

 

[Adisa]

Manchester United is a global business with good credit rep and loads of collateral. Put the stadium and/or the land around it and it's not at all impossible to workout a long term loan on preferential interest. Goes without saying the club will be instantly annihilated if it goes tits up.

That's not how the debt market works mate.
If the club were to release bonds, there would be no chance of an A rating.

 

[Mr. Robot]

In that case we might ban all the information coming from journalists who fecked up through the years starting from those who claimed that SJR and Jassim had placed a bid on deadline day when it wasn't the case. That would probably leave us with just Howard Nurse whose inside information is probably telling him that we'll soon be bought by Louis Edwards.

Very true. My point remains though - if we're posting Tweets or videos by Muppetiers or Flewers or SaeedTV, it's basically allowing any old nonsense being posted here as "news".

 

[Klean]

The NFL Franchise Washington Commanders just sold for $6.05B (5.52B Euros). Unfortunately, this would most likely mean the Glazers are re-evaluating the situation as the Manchester United Brand is worth much more than that. I would guess that this chatter is to put pressure on the 2 legit offers and try to squeeze more money out of the sale process. Without competition, there is no incentive for either to increase their offer.

Worse case its a contingency plan for the Glazers to buy out the siblings and remain in control. The team is ascending now, so the valuation will only go up from here.

 

[Skills]

The NFL Franchise Washington Commanders just sold for $6.05B (5.52B Euros). Unfortunately, this would most likely mean the Glazers are re-evaluating the situation as the Manchester United Brand is worth much more than that. I would guess that this chatter is to put pressure on the 2 legit offers and try to squeeze more money out of the sale process. Without competition, there is no incentive for either to increase their offer.

Worse case its a contingency plan for the Glazers to buy out the siblings and remain in control. The team is ascending now, so the valuation will only go up from here.

NFL franchises are far more profitable

 

[devilish]

Very true. My point remains though - if we're posting Tweets or videos by Muppetiers or Flewers or SaeedTV, it's basically allowing any old nonsense being posted here as "news".

I tend to post videos when I think that their argument make sense. The idea is to create debate. I can't care less of ITK arguments

 

[7even]

If I remember correctly around 2005 or something the PIK loan taken by the Glazers had an initial interest rate somewhere around 14%. If I not mistaken they had their MUFC shares (inside their holding company Red Football JV) as a security against the loan. At the time the the FEDs fund rate was almost similar to what it’s toady, somewhere around 5%.

Trust an old man. All siblings will sell.

 

[Klean]

NFL franchises are far more profitable

Even if they are it's a new benchmark to compare it to. If the current offers are deemed too low, this sale can be used to exert more pressure on the potential buyers to increase their offer.

If Chelsea sold for $3.1 billion and the Commanders sold for $6.05B then a $5 - 5.5B number seems reasonable. If the offers are below $5B then this resets the market expectations to some degree.