Manchester United Mutual

[Neil Thomson]

<a href="http://www.wldcup.com/news/2002Dec/20021222_16356_world_soccer.html" target="_blank">Secret plans to make United a Mutual</a>

I think this would be a great thing, but what do you think? Our share price is pretty low right now, and we know from the Sky bid that we're at risk of being bought by a big media company. While Shareholders United have a noble aim, its a rather lost cause for them, but this sounds more feasible, and the connection to the Coolmore mafia makes it quite credible.

 

[oscar74]

I think it would be a disaster - the problem is that the plan is apparrently to buy out the existing shareholders equity by raising debt. The existing market cap is #285 - but in order to get the shareholders (who are after all pension funds and other financial institutions) to sell a hefty premium would have to be paid. So let's say they buy it for #400 million (I don't see shareholders selling for less).

The problem is that all this money would simply end up in the hands of the exisiting shareholders (note this would include the "Coolmore Mafia") - and not the club itself. The club would then be left with the need to service the debt that bought out the club. Let's say that debt pays a low interest rate of 6% - this would mean that #24 million a year would be needed JUST TO PAY THE INTEREST. That's money which today can be used for players wages, transfers, ground improvements and so on.

My guess is that the idea of having an "independednt board" including fans is to avoid a repeat of the IMUSA blocking of the BSkyB takeover. But in my opionion this sort of structure would be much worse since the financial strength of the club would be being squandered to make the current shareholders rich.

I should say at this point that I am a shareholder - have been since the day they went public - so would make money out of this move - but as a supporter I would tell you it is the WORST POSSIBLE thing that could happen if true it must be resisted with as much protest as possible.

 

[Neil Thomson]

I must admit that it would be better if it wasn't bought by raising debt, but I doubt the money could be raised any other way (even if it was less than the £400m you perhaps optimistically reckon).

 

[oscar74]

Originally posted by Neil Thomson:
<strong>I must admit that it would be better if it wasn't bought by raising debt, but I doubt the money could be raised any other way (even if it was less than the £400m you perhaps optimistically reckon).</strong><hr></blockquote>

Exactly - so why do it? All you would have is a lot of very rich ex-shareholders and an impoverisished club. Leave crap like this to City and Leeds.

 

[WeasteDevil]

It doesn't make sense. Being a PLC gives the club access to finance it wouldn't have access to if we were not a PLC.