Sir Jim Ratcliffe's bid to buy Manchester United appears to have suffered another blow, with the Qatari group, led by Sheikh Jassim reported to be growing increasingly confident of securing a deal.
The takeover is yet to be resolved despite a series of deadlines, set by the Raine Group, who are overseeing the sale of the club on behalf of the Glazer Family. However, the Qatari Group are now believed to be growing in belief that a deal can be secured to acquire one of the world's biggest clubs.
It has been eight months since the process began, with the first deadline for bids having been in February. Delays have followed this, with both leading bidders hoping to reach the Glazer's £6 billion asking price, with complications now emerging regarding the concerns of those who hold a minority stake in the club.
Bloomberg reports the Qataris are growing in confidence, with INEOS chairman Ratcliffe having now been handed an ultimatum to restructure the bid. Reports suggest the structure of Ratcliffe's current bid would be to buy-out the Glazer family's 69 percent share, but not offer anything to the minority shareholders, which would then raise the possibility of legal action. This has aided Sheikh Jassim, with the Qatari offer reported to be structured with the goal of acquiring the club in its entirety, becoming its sole owner.
A takeover from Ratcliffe could leave those currently with minority stakes in the club with discounted shares. However they would have no say in whether or not the Glazer family could sell their shares due to the club being listed on the New York Stock Exchange. The Glazer family own 69 percent of the shares in United, meaning that they are above the threshold to push through a deal without approval from their minority partners.
The need for Ratcliffe to restructure his proposal comes amid a threat of litigation from existing minority shareholders. It is claimed that Sheikh Jassim is now the only 'proper bidder', with Ratcliffe's proposal 'dead in the water'.
Dr Naaguesh Appadu, senior research fellow at Bayes Business School explained the scenario earlier this year, saying: “If we’re talking about a firm listed on the UK stock exchange, if someone buys 75 percent of the firm it can be delisted and then when you reach 90 percent of the company you own can squeeze out the remaining 10 percent. But that’s in the UK,
“However if it’s on the US stock exchange, 51 percent is enough for the firm to take a decision on the rest of the shareholdings. If there’s a proposition to take over more than 51 percent, the 31 percent won’t have any say.
“If part of the 31 percent might not accept to sell their shareholdings, whoever is going to buy the Glazers’ 69 percent will still control the company and shareholdings. Therefore if ever the remaining shareholders want to buy shares it’ll be at the original price - they had a choice to sell it but never sold it so then won’t have that choice."
