Manchester United's bidding war puts Jim Ratcliffe in the lead

The backstory: British billionaire Jim Ratcliffe is the brains behind the chemicals group Ineos, which he founded in 1998. He currently wears two hats as the company's chairman and CEO, holding a two-thirds stake. Forbes estimates his net worth at US$18.7 billion. Born in 1952, he's one of the UK's wealthiest people and has dipped his toes into various industries, from petrochemicals to sports.

Now, speaking of sports, Ineos has left its mark all over the field. It owns Nice, a French Ligue 1 club, and FC Lausanne-Sport in the Swiss Super League. Plus, it’s partners with Racing Club Abidjan in Ivory Coast Ligue One and sponsors the Grenadiers, a top-tier cycling team.

Ratcliffe’s also a lifelong Manchester United fan. Manchester United is one of the world’s most popular football teams and is currently owned by the Glazer family (six siblings) after their father, Malcolm Glazer, bought a controlling stake in the team in 2005. But they’ve faced a lot of heat over their ownership, which has piled debt onto the club and alienated passionate fans with some of their business decisions.

More recently: Last August, some rumors surfaced that the Glazers were considering selling a minority stake in the club, and Ratcliffe had shown interest at the time. Then, in November, the news buzzed that the Glazers hinted at possibly selling their ownership. In March of this year, Ratcliffe offered to buy 69% of the shares in Manchester United. The other main contender in the bidding was Sheikh Jassim bin Hamad Al Thani, chairman of Qatar Islamic Bank – but he was only interested in a complete takeover of the club.

The development: After months of negotiations, it seemed that not all of the Glazer siblings were on board with selling off the club completely. So Ratcliffe took the strategy of offering instead to buy a minority stake in the club, which would let some of the Glazers cash out while others would still be involved in the club’s business. Reportedly, Ratcliffe revised his bid to acquire 25% of the team for over US$1.5 billion. If this deal got the green light, it would value the club at US$6.5 billion, excluding the club's net debt, which is over US$600 million. Currently, Manchester United's stock market value is about US$3.3 billion. 

Ratcliffe’s bid was a little higher than the competing bid from Sheikh Jassim, which valued the club at around US$6 billion – but would give him 100% ownership. This week, Sheikh Jassim’s group withdrew its bid, pointing to months of unsuccessful negotiations. Jassim had already said he wouldn’t take the bid any higher. So now, it looks like Ratcliffe is the front-runner for the deal.

Key comments: 

“I will oppose anything that gives the majority Glazers a materially better deal than minority investors,” said Ricky Sandler, founder of hedge fund Eminence Capital. “That is for sure.”

“We have always been neutral between Jassim and Ratcliffe,” said Chris Rumfitt, head of Manchester United Supporters Trust. “But if the Ratcliffe deal maintained the Glazers’ ultimately in charge, I think that is something fans would be very hostile to.”

“The strength of Manchester United rests on the passion and loyalty of our global community of 1.1 billion fans and followers,” said Manchester United executive co-chairmen and directors Avram Glazer and Joel Glazer last year.