Ratcliffe’s Manchester United deal delayed by concerns for minority shareholders

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Sir Jim Ratcliffe’s push to purchase a $1.3bn stake in Manchester United has been hampered by concerns over the future treatment of minority shareholders, contributing to weeks of delays to football’s highest-profile transaction, according to two people with knowledge of the matter.

The British chemicals billionaire and the Glazer family that owns the English Premier League club had agreed on the broad terms to buy a non-controlling stake in November, but a formal announcement has been repeatedly pushed back.

One of the obstacles has been how United’s public shareholders would be treated in any future transactions between Ratcliffe and the Glazers, according to people familiar with the matter.

The hold-up can be partly attributed to concerns held by certain members of Manchester United’s 12-person board about potential future deals and whether they would allow the Glazers to cash out on terms that would not be extended to other shareholders.

However, people involved in the process remain confident of finding a solution, with talks focused on resolving the matter under way in recent weeks. The Ratcliffe team is also confident of getting a deal done. An announcement could be imminent but might slip to after Christmas, two people with knowledge of the situation said.

United and Ineos declined to comment.

The concerns are the latest challenge in a complex deal that has been held up before due to similar concerns for minority shareholders.

The situation is complicated because United has two classes of stock. The New York-traded A shares have inferior voting rights to the B shares held exclusively by the Glazers.

UK fund manager Lindsell Train, Ricky Sandler’s Eminence Capital and Chicago-based Ariel Investments are among the biggest holders of the A shares, which are largely held by non-family shareholders. Hedge fund billionaire Leon Cooperman has also accumulated a stake. Sandler has previously threatened to oppose any deal that treats minority shareholders differently from the Glazers.

Ratcliffe and his Ineos group are set to acquire around 25 per cent of the Glazers’ super-voting B shares and 25 per cent of the New York-traded A shares. Each B share has 10 times the voting rights of a single A share.

The British tycoon had previously reformulated the Ineos bid because of concerns that arose when his original proposal for majority control envisaged buying out only the Glazer family’s B shares without extending an offer to A shareholders. Ineos subsequently changed the proposal to buy 25 per cent of each share class.

The six Glazer siblings own 110mn B shares. Selling 25 per cent of the total at $33 would generate more than $900mn for the family. The deal would value United’s equity at roughly $5.4bn, implying an enterprise value of more than $6bn including debt.

The New York-listed club’s stock exchange filings warn that the “concentration of voting power in our Class B shares may harm the value of our Class A ordinary shares” by “delaying, deferring or preventing a change in control”, “impeding a merger, consolidation, takeover or other business combination”, or “causing us to enter into transactions or agreements that are not in the best interests of all shareholders”.

Ineos’s proposal values United at about $33 a share. The A shares closed at less than $20 each on Friday. Ratcliffe is also set to inject fresh capital into the club and take significant influence over football operations.

The Manchester United share price hit a high of more than $27 in February on expectations that the club would be bought in full by Sheikh Jassim Bin Hamad Al Thani, the son of one of Qatar’s richest men. However, his Nine Two Foundation withdrew from the bidding in October.