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Daily Telegraph

MANCHESTER United’s board want to have their cake and eat it. They hope that their stance will put American tycoon Malcolm Glazer and the shareholders in a corner while the board will emerge unscathed and avoid the wrath of fans who are vehemently opposed to Glazer owning their club.

This is the implication of the board’s decision to ask Glazer to either make a bid or stop pestering the board. For more than six months the two have been playing an elaborate game of poker hoping the other side would blink first. But now United’s board feel they have found a way of forcing Glazer to blink. For some time, advisers have been telling the board that they should go to the Takeover Panel and force Glazer to make a formal offer.

If he fails to do so then under the rules he has to promise not to bother the club for a period of six months. Popularly known as “put up or shut up” clauses, they are part of the anti-stalking provisions of the City Code on Takeovers and Mergers meant to protect companies from corporate predators. The City love a bid but the Takeover Panel dislike “will he won’t he” pre-bid games. They feel this destabilises management and prevents them from doing their job.

This is what Manchester United’s board have convinced the panel Glazer has been doing for the past few months. They have pointed to the fact that although there has been much speculation of Glazer making an offer, and many meetings between Glazer’s advisers and that of United, the American has never tabled an offer.

What he has tabled over the past few months are two business plans on how to run the club. The Glazer hope was that the board would be so taken by the business plan they would accept it. Glazer would then make a formal offer which the board would recommend and Glazers would win control at Old Trafford, subject to the approval of the two main shareholders, John Magnier and JP McManus, who own just over 29 per cent of the shares.

The board rejected the first plan outright and in retaliation Glazer forced out three directors from the United board at the next annual meeting. After further talks, the board softened their stand allowing Glazer two weeks to look at the books, providing management accounts, cash-flow forecasts and other internal financial information. Glazer came back with a revised business proposal.

The board, after much agonising, have come to the conclusion that while the price Glazer may offer – 300p which values the club at £800 million – is a fair one and may be attractive to some shareholders, they cannot accept the plan.

United would take on too much debt – they have none at present -and Glazer’s ideas for making more money for the club are “aggressive”.

Sources close to Glazer said yesterday they were surprised by the board’s decision and see it as an invitation to make a direct appeal to the shareholders.

The board will have to give an opinion on the offer and will have to say whether the price is right. Since from a shareholders’ point of view as opposed to the fans’, the price is what matters, there may be shareholders eager to take Glazer’s money.

In that case the board may find it is Glazer who ends up with control of the Manchester United cake, with not a slice for the directors.

© Mihir Bose

      

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