Kelvin Bowoto
Sir Jim Ratcliffe has gained permission from Premier League directors and owners’ tests for his 25% ownership of Manchester United.
A deal will be completed within days as the Football Association approves a final agreement after Ratcliffe extended his purchase bid to the end of the week.
United’s Class A shares climbed more than 6% to $21 (£16.57) in post-market trade after the tender offer deadline was extended from Tuesday to Friday.
Club papers filed with the US Securities and Exchange Commission (SEC) overnight confirmed that the league had quietly approved the transaction.
A Premier League statement announcing the decision is not expected until Ratcliffe completes it, which is likely next week.
According to filings, there is no doubt that the Ratcliffe sale will be completed based on United’s shareholding structure. By February 9, approximately 36.7% of the outstanding Class A shares had “been validly tendered (and not validly withdrawn) pursuant to the offer,” according to the filings.
The Premier League’s consent to the deal is verified in the offer terms.
“Premier League Approval” has “already been obtained,” the paper reveals, although Football Association Approval is still pending.
Ratcliffe, 71, has pledged to gain complete control of football operations as part of his arrangement for a minority stake, but the Glazers have now agreed that Ineos should have a larger say over critical commercial decisions.
Last week, Telegraph Sport revealed plans to build a “Wembley of the North” as part of an ambitious 90,000-seater makeover of Old Trafford.
The Ratcliffe deal is now almost complete, following an unprecedented story in which the Glazers first began discussing a sale in November 2022.
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Share prices rose overnight, wiping out losses from earlier in the trading day on Monday as investors speculated whether the offer would be extended. Ratcliffe agreed to buy the stake in December, allowing investors to swap around one-quarter of their Class A stock holdings for $33 per share, which is significantly higher than the current market price.
According to the regulatory filing, 19.4 million shares were legitimately tendered as of Friday’s close, indicating that Ratcliffe has already crossed the barrier to finalizing his transaction.
United’s American owners are likely to get a cash bonanza of roughly £715 million from the sale of B shares to Ratcliffe. That eye-watering sum adds to earnings of around £465 million through past sales of A shares and around £150 million in dividend payments.
However, it was stated in a prior regulatory filing that Ratcliffe’s agreement with the Glazers will result in no dividend payments for at least three years.
United was purchased by the Glazers for over £790 million in a hostile takeover in 2005, and since then, approximately £1 billion has been drained out of the club in loan repayment, interest, and management fees to support the leveraged buyout.
In addition to purchasing Glazer shares, Ratcliffe is buying up to 25% of Class A shares at the same $33 per share price through his Isle of Man investment vehicle Trawlers Ltd. in order to reduce the risk of legal action from other minority shareholders such as Eminence Capital, Lindsell Train, and Ariel Investments.
The transaction values United’s equity at approximately $5.4 billion, giving the club a total enterprise value of $6.3 billion, or nearly £5 billion.
Ratcliffe has reportedly offered a further $300 million (£237 million) for Old Trafford and infrastructure improvements. If the Glazers decide to sell more B shares in the future, the billionaire from Oldham will have first refusal for a 12-month period.
Furthermore, the deal’s “drag-along” rights require Ratcliffe to sell his shares in exchange for a $33 per share cash offer from the Glazers if they decide to sell the entire company 18 months later.
A drag-along right is a provision or phrase in an agreement that allows a majority shareholder to compel a minority stakeholder to participate in the sale of the company.
Techrectory with Agency Report.
