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Speculation over Man U hotting up in stock market
Manchester, Oct 09: Two Irish racehorse magnates seized nearly a quarter of Manchester United by buying TV firm BSkyB`s stake in the English soccer champions
Manchester, Oct 09: Two Irish racehorse magnates seized nearly a quarter of Manchester United by buying TV firm BSkyB's stake in the English soccer champions
Manchester United confirmed a report that Rupert Murdoch's BSkyB sold its 10 percent share of one of the world's richest soccer clubs to Irish racing millionaires J.P. McManus and John Magnier, taking their stake to 23.15 percent. However, a source familiar with the situation said there were no plans for a takeover of the club. The 62 million pounds ($104 million) deal fed talk that United could fall prey to a bid, as did London rivals Chelsea, and shares in the club raced to a three-year high. McManus and Magnier's shareholding is worth 150 million pounds -- dwarfing the 60 million pounds Russian billionaire Roman Abramovich spent buying Chelsea.
"Manchester United is different to any other football club", said Hank Potts, market analyst with Barclays Stockbrokers. "When we saw Roman Abramovich coming into Chelsea, we saw pretty much of a revolution. We saw a guy pumping millions of pounds into that. Now, Manchester United is on a much stronger footing. They've got a global brand. They've got a global retail business which is able to generate significant profits. So we are talking about buying into existing and fully established business as opposed to simply buying a hobby."
McManus and Magnier's investment vehicle Cubic Expression declined comment. Both men have been close associates of United manager Alex Ferguson, but newspapers have recently reported tensions between Magnier and Ferguson over their jointly owned champion racehorse Rock of Gibraltar.
"Implications for Manchester United is really who takes control of the company. Is someone going to come in and make a full bid, take the company private, than starts looking at control of the company. Who will they decide to keep on? Will they decide to keep Alex Furgeson on? Will they decide to pump more money into the football club in an effort to gain even greater riches to go after even bigger prices? That are the questions, I guess, people at Manchester United have to be asking themselves," said Potts.
Manchester United shares jumped as much as 8.5 percent on Tuesday (October 7). At 1250 GMT they stood 3.8 percent higher at 244 pence, valuing the club at around 640 million pounds ($1,024 million US dollars).
"It's clear the stocks are in play at the moment. The question really is - is it simply the Irish connection trying to block another bid, holding back, determining whether they are going to make a full bid, or is it the first step of them making a dash for control," said Potts.
BSkyB offloaded its 26 million shares in Manchester United for 239 pence each. The deal ends the broadcaster's involvement with the club that it was blocked by regulators from buying for 240 pence a share in 1999.
Takeover rumours have intensified around Manchester United since Abramovich bought London rivals Chelsea and began pouring more than a hundred million pounds into buying star players.
Investors including U.S. sports magnate Malcolm Glazer, owner of Super Bowl champions the Tampa Bay Buccaneers, and the billionaire behind reality TV show "Big Brother" John de Mol have been gradually building their stakes in United, although the club has insisted there have been no bid talks.
Behind new top shareholders McManus and Magnier, Scottish mining millionaire Harry Dobson has around 6.5 percent, Glazer has 5.9 percent, hedge fund Lansdowne Partners has 5.2 percent and de Mol has 3.5 percent.
Manchester United shares have raced ahead since hitting a low of 85 pence last November. Analysts said BSkyB had timed its exit well, and added the move was no surprise given it was blocked from bidding for the club.
Bureau Report