Guessing it means he can take part in board level discussions about the sale
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Guessing it means he can take part in board level discussions about the sale
I would be very surprised if we didn't end up owned by the Emir of Qatar, the Saudis or a Dubai based investment fund. This has oil-state backed bid written all over it.
Full member too!
Damn we are getting bought by Disney. They got Professor X on this.
So from the headline, I’m assuming representatives of the Glazers are hoping to strike a deal within the first 3 months?
That last line, top quality
That's the spirit. Alright women, who cares if you need a male's permission to marry, study, drive or travel - you can go do some shopping like good little girls!
The state of this site since this world cup is fecking desperate.
Please, respect their culture.
If the man next door beats his wife should you even call the police if you've been silent about Britain's colonial past?
You should call the police, but only to turn yourself in.
Agreed
They will quite understandably be bullish about timescales/sale price. Doesn't mean we won't be sold for a gazillion pounds in the next three months, but I wouldn't bet your house on it.
That wouldn’t go down well in the Guardian.
I am on the run, but what are the quorum rules for the board of the Plc? They need another independent director if the Glazers on the board can’t participate in a resolution due to it regarding themselves?
Shouldn’t we be turning you in?
There can be a few reasons for this.
1. I am fairly certain that this is made due to legal aspects or formal reasons. There is no purpose in appointing someone to the board just because they will work with something or be active in some regard.
2. The most common reason for changes of a board in connection with a merger are the quorum rules of the Board. Typically, if a director has a conflict of interest he/she cannot participate in a resolution and the board can only make resolutions if more than half of the directors are present. So if you have like a board with 6 directors a 3 of them have a Conflict of Interest regarding a Merger, the board would not have a quorum. If you elect another director, 4 of 7 can participate and you can make decisions regarding the merger.
Before this move, the board of the club had 11 directors. Of those, 6 were "Glazers", 2 are Glazer people (Arnold and Baty) and 3 are independent directors. After this move, the board has 12 directors of which 6 are Glazers and 6 are non-major shareholders of the company (i.e. not directly affected by a merger).
What are the rules on Conflict of Interest and quorum's for Manchester United plc? First of all, this is a field were one thing can be acceptable from a formal point of view, another standard can apply in case there is litigation following a merger which there always is. I can't provide any info on any unwritten Cayman Island/US merger litigation standards. But if we look at the Articles of Association of Manchester United plc -- there is a quorum if you can get a "simple majority" of the Directors appointed from time to time. Which directors can be present for a resolution? The AoA are impressively flexible. Remember, the Cayman Islands are as majority owner friendly as it gets, and the AoA expressly states that no matter if you someone has a conflict of interest they can participate in a board resolution. But all this is only to the extent possible under the Cayman Islands' Companies Act.
In summary, it does not seem like the board need another director in order to form a quorum for a board resolution on a merger. However, from a risk management/litigation POV -- there could be some unwritten rules they want to adhere to, but I don't quite think so. If we want to be very conspiratorial -- one could speculate on what happens if none of the Glazers vote on an issue. Before the appointment of Patrick Stewart, you had two external guys appointed by Avram and Joel (R. Arnold and Cliff Baty) and three independent directors. Now they can hold a meeting where more than 6 participates, say Richard Arnold is elected Chair of the meeting, the Glazers lay down their votes due to the risk of getting sued, the independent directors do not take any responsibility and lay down their votes or votes against a merger, and Arnold (casting vote) + Baty + Stewert votes for the merger. 100% speculation and probably very unlikely.
3. It is very common that a listed company, with several directors on the board who has some form of conflict of interest, for risk management reasons appoint an independent sub-committee of uninterested directors to consider a takeover. This is my best bet for why this is done. I.e. that the Board of Manchester United plc will establish an "independent takeover committee" including the non-conflicted directors, to deal with everything -- practical -- related to the merger, since the Glazers' have a conflict of interest. Like its possible that Arnold and Baty also are deemed to have a conflict of interest, which only would leave the independent directors Robert Leitão, Man Utd Sawhney and John Hooks in charge of the independent deal committee. On top of that, Robert Leitão is actually the Managing Partner for Rotschilds who are advising the Glazers on the sale of the club. Does he really not have a conflict of interest even if the club label him as an "independent" director? If so, that would leave just Man Utd Sawhney and John Hooks -- 'here you go, everyone know that you will get sued, but of the 11 directors of the board 9 have pulled out so you must take your responsibility now'. I have been in this situations a couple of times my self. You leap a bunch of responsibility on a few directors -- who always are the least suited for it. But if the General Counsel of the Club joins the board and participates on the committee, the remaining few get as much support as they can get.
4. So what does it mean if the Board of Directors have appointed an independent sub-committee to handle everything related to a merger? Does the Glazers lose control? No, definitely not. A merger ultimately requires approval by the shareholders at a general meeting -- which the Glazers control -- so the Glazers still has 100% control on if a merger takes place. Its just a formal measure done so that you at least can pretend that the board is independent and acts in the interest of all shareholders.
Having considered this back and forth, like I can only come to the conclusion that this would mean that a merger is close. Sounds scary to say, but its what I would bet on. There are many X factors, many unknown variables.
When coming to that conclusion, its based on the assumption that Patrick Stewert is appointed for the reason the the board is creating a sub-committee to which it is delegating everything regarding a merger as well as the following assumption: Theoretically, the job of the bid committee could of course be to -- turn down -- a merger proposal. But these processes as far as I am aware always have a practical side and a formal side. To get a merger approved, you must have secured the Glazers support at a general meeting of the shareholders of Manchester United plc. That is what you negotiate first. When you have that in place, you iron out the formalities with the board. I just cannot envision a situation where someone makes a formal merger proposal to the board of the club without first having cleared it with the Glazers. I don't know what is due process on the Cayman Islands, but it would surprise me a great deal if a need to appoint an independent sub-committee occurred before a point where you have some kind of agreement between the main owner and a bidder.
There are so many knowledgeable people at this place. Would love to hear your input. Why is a General Counsel of a Company amidst strategic/merger discussion all of a sudden appointed as a director of the board? @ATXRedDevil @Big Ben Foster @pogbasformerbarber @Redjazz
not Picard?
As a long-tenured officer, he probably (I'm too lazy to look at the relevant SEC filings) has a lot of equity (thus wouldn't be disinterested) and is definitely not independent. My guess is that he's been appointed because a take private merger of a large public company incorporated in the Caymans with US reporting obligations comes with a lot of legal nuances and risks, so they want him on the board to leverage his experience for the benefit of the other directors.
Make it so.
This is a solid theory…another thought is this move would seemingly create an “attorney-client” buffer for information flow. With a transaction of this size and level of potential controversy, a potential lawsuit is likely and his communications would be privileged and thus shielded from leaks.
Good lass bringing back the bold
Getting a solid manager in Ten Hag and then getting owned by Arab country that will bump ton of money into the team...I think we're on our way back, boys ! I bet now in 2-3 years max of Arab splashing money on the club, we'll become champions again.
Could be one of those things that culturally is just different. Ie could just be a comfort thing.
But in the environment I am working in, it would never happen. Would be seen as improper even. Why?
*As General Counsel, it is literary his job to among other things advice the board on these things (in reality this is so complex that you probably have 5-6 groups with different specialities from Latham & Watkins involved with the merger, so his job would mostly consist of being a coordinator between L&W and the board).
*As a director, he becomes personally liable for his dealings. He goes from being obligated to do his best towards his employer, to assuming personal fiduciary duties towards all shareholders. They aren’t exactly doing him a favor, right? It’s basically — your job will be exactly the same, but in addition to performing the same duties, we just want you to also risk your house when you perform the same job. Questions?
*One board director cannot lean on the knowledge of another board director. They have a jointly and solitary responsibly towards the shareholders. If a Board consists of A+B+C and a legal expert D. If D is the general counsel of the company or work for a law firm engaged by the board — A, B and C can rely on that advice. If D however is included on the board, it generally decreases the other directors possibility to rely on any advice D provides.
If someone suggested something like this in relation to clients I work with, like big mergers in Western Europe, it would be shut down immediately. If the board is obligated to make difficult decisions — it should not bring in a director with expertise in that area. They should buy expertise advice from someone with proper insurance and knowledge that can provide advice to the entire board on how to handle it.
Also, he is of course not independent towards the plc — but a little share holding wouldn’t make him conflicted in relation to a merger, right?
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That makes sense. Thanks for sharing your opinion.
This is partly why I have a feeling it could involve “attorney-client privilege” protection. Because I think your assessment is right from a liability and conflict standpoint. It doesn’t make sense.
That protection can be applied broadly if he maintains a role as an attorney for the Club. If he essentially handles aspects of the communication between parties that would traditionally be handled via a standard board member it might be an added protection from future discovery in a lawsuit. I’ve actually seen this implemented in the past, albeit sparingly. You put your attorney in a non traditional managerial role, yet their communications can be argued as privileged.
It seems a given these days you have shareholder lawsuits after a transaction like this, and who knows what potentially embarrassing communications could be made public through discovery.
It could also be as simple as he’s just been identified as really good and this is a significantly lucrative move for him in the shorter. Sometimes the simplest answer is the right one…
Either way I think it clearly signals the beginning of the beginning of a transaction…
So.. how does this work when UAE already owns City? Dubai and Abu Dhabi basically compete with each other? I don't get it.
UAE does not own City. Abu Dhabi investment group own them.
Yeah, that is an interesting take and thanks for your insight! It’s one of those things that is foreign in Europe. Deutche Börse would go, client/attorney privilege? You have undertaken to provide us with all information relevant for any investigation we want to perform when agreeing to obey to the issuer rules, there are no exceptions for privileged information there. Please send us all correspondence with your law firm.
Then any disgruntled shareholders just piggy back on the stock exchange’s findings. And the stock exchange must even send a copy of their file to the Financial Supervisory Authority.
UAE is a country but it is also a federation of Emirates. Each one is autonomous to a degree. And in the case of football clubs it usually isn't a case of one Emirate owning a club but a company that may or may not be owned by one particular emirate.
Are you mixing Qatar with Dubai in this post? You mention Dubai getting bailed out, but then proceed to talk about Qatar investment fund the next paragraph but mention the asset value of ICD.
Re Dubai in 2009 - a very simplistic view. Dubai was just getting started with diversifying their economy when the financial crisis hit in 2008. It's way different now then back then.
I have previously written that Abu Dhabi are very keen/dependant on Dubai succeeding in their vision, as a successful Dubai benefits Abu Dhabi and UAE in general massively. Their royal families are also very closely linked. Hence why Abu Dhabi, who earn a feck tonne due to rising energy costs, have noe trouble backing their little brother. Dubai has been very successful in building the city as a major financial and tourist hub - the two sectors who took the biggest hit during the pandemic.
It's hard to tell how big their cashflow is, due to several factors like the full effect of the pandemic (local and worldwide), lack of transparency, asset portfolio (ICD) mostly tied up in the local market etc. They reported red numbers and a dip in asset value after 2020, but records for 2021 are in black and asset value going up again. On paper they seem to have manage to stabilize the economic situation (although loan ratio going up very high) and are actually expecting a small increase in GDP for 2023.
The EU is about to blacklist Dubai though, which can rule them out. Or maybe Brexit can help after all?
No, my point with that wall of text was just, it’s hard to know exactly what state any mooted buyer is in right now. Be it Dubai, Qatar, Elon Musk, Mukesh Ambani or just about anyone (other than Apple, Amazon and the likes). Just because someone holds 160bn in shares, they might not have 10bn at hand.
Thanks for your insights into Dubai and Abu Dahbi! For me, the first of those countries you heard about in financial circles was Dubai. Then I remember how much the market reacted to its troubles back around 2009. Wasn’t there some reports on WS dumping a lot of CDFs on Dubai?
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Feck, called a contact in the US owing me a favor and asked why a Cayman company listed on the NYSE amidst merger speculations would appoint its CLO as a board director.
He right away asked me if the CLO was American or European — and if the later was the case, how many on the board were US citizen. After noting that it was 6 of 11 before the change — he informed me that if a so called Foreign Private Issuer has a majority of US directors on the board, it will become subject to the same reporting obligations as a US company (which supposedly is quite cumbersome)... Hence they were in a real hurry to get another non-American on the Board before the end of the year. This void was of course created by Ed Woodward stepping down earlier in the year.
So 100% unrelated to any sale of the club…
He right away asked me if the CLO was American or European — and if the later was the case, how many on the board were US citizen. After noting that it was 6 of 11 before the change — he informed me that if a so called Foreign Private Issuer has a majority of US directors on the board, it will become subject to the same reporting obligations as a US company (which supposedly is quite cumbersome)... Hence they were in a real hurry to get another non-American on the Board before the end of the year. This void was of course created by Ed Woodward stepping down earlier in the year.
So 100% unrelated to any sale of the club…
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Been linked with Gakpo, Felix and Enzo Fernandez by reliable journos today. Wonder if it’s at all linked to investment or a new owner is coming soon.
there is definitely a large contingent of LW lawyers working on it, spanning numerous practice areas.
Every director will be indemnified and they will be covered by D&O insurance.
No, a little equity wouldn’t make him conflicted to that extent, but it is a conflict and has to be disclosed in sec filings. As an officer he may have golden parachute payments due to him on a chance in control.
ultimately, I don’t know what the reason would be for adding him to the board. I’m not a cayman law expert and haven’t don’t public merger work in a few years. This is your wheelhouse!
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