The Qatari bid to buy Manchester United has dramatically collapsed after Sheikh Jassim bin Hamad Al Thani quit talks in frustration at the Glazers’ £6 billion valuation.
Sir Jim Ratcliffe is left in pole position to agree a potential investment deal within a matter of weeks after his main rival ran out of patience with a ten month saga. Sheikh Jassim had tabled a 100 per cent offer to end the Glazer regime entirely, but his fifth and supposedly final outright bid on June 7 was understood to have been in the region of £5 billion.
Talks since then have continued sporadically, but Sheikh Jassim informed the Glazers in recent days that he had lost faith in the process. Sources close to the Qatari group are understood to have concluded the American owners’ price tag was “fanciful and outlandish”.
One source close to talks said Sheikh Jassim’s final offer had “almost double” United’s current stock market valuation of $3.2 billion (£2.7 billion) Jassim had also increased his promise of investment in infrastructure to $1.7 billion (£1.4 billion)
Sources close to the Glazers pointed out that promised investment from various suitors was never going to be a deciding factor in the bid. “Sheikh Jassim has tried desperately to meet the Glazers’ outlandish valuation for over 9 months, and believes he would have been the dream owner,” one source close to the Qatari bid said.
It is more than 10 months since United first announced its “strategic review”, but insiders insist talks with other suitors are in “good health”. For more than six months, Sheikh Jassim and Ratcliffe, the petrochemicals billionaire, had been frontrunners to secure an agreement with the Glazers.
But Sheikh Jassim now walks away less than a fortnight after it emerged Ratcliffe was looking to outmanoeuvre him with a new 25 per cent bid. While Ratcliffe may not have been able to match the financial might of Qatar, the Glazers were never convinced by Sheikh Jassim’s bid proposals.
One source with knowledge of talks said the first offers tabled in the spring were significantly below £5 billion. At some point, however, it had long been expected that the Qatari group would finally find the funds to blow the controversial American family away.
Sheikh Jassim, 41, spent his younger years watching his father on one of the biggest property splurges London has seen. State investments at Harrods, Chelsea Barracks, swathes of Canary Wharf and top hotels were all signed off by the father, Sheikh Hamad, better known as HBJ.
The former Prime Minister then landed in the capital exactly a decade ago to open the 72-storey building the Shard, which is 95 per cent owned by Qatar. However, several investment options at United remain in the offing for Ratcliffe, who could still look to attach long-term ownership clauses on an initial minority deal.
Despite facing mounting criticism from fans as the club faced fresh difficulties on the pitch this season, the Glazers have refused to rush into a deal, despite initially setting a completion target of last April.
About 69 per cent of United is owned by the American family, the rest spread among multiple stakeholders who own shares listed in New York. With complexities to overcome around the club’s structure, Ratcliffe had repeatedly promised the Glazers he could be more nimble than Sheikh Jassim in overcoming potential hurdles.
Ratcliffe, however, is now considering an initially staggered offer approach. Prior to the summer, it seemed US investment firms, including Elliott Management, Carlyle Group Inc., Sixth Street Partners, and Ares Management Corp, were the only groups with interest in a minority stake.
Those close to the Glazers maintain the family is “looking for the right transaction, not just any transaction”. “Whether it’s continued participation for a future exit, whether it’s continued participation with a new partner, who knows,” the source added. “Discussions are multi-layered.” The penny appears to have dropped in the Ratcliffe camp that “there’s a lot of different ways to skin the cat”, another source added.
In a video filmed to mark the Ineos’s 25th anniversary, the British billionaire made clear last month he is not giving up hope. “You can’t really contemplate acquiring a brand like Manchester United and failing because the failure is just far too public and too excruciating,” said Ratcliffe. Ratcliffe, being interviewed for a promotional video filmed by Ineos, said he had learned from “difficult experiences” after buying French Ligue One club OGC Nice and Swiss Super League team FC Lausanne-Sport.
“The Manchester United bid would have been unthinkable two or three years ago if we hadn’t had some of the experiences, and quite a few of them difficult experiences with Lusanne and Nice,” he added.
While Ratcliffe initially stood by the terms he offered in the third round of bidding, Sheikh Jassim, his main rival, went on to table a fourth and then fifth and supposedly final outright bid on June 7.
Ratcliffe, whose Ineos firm generates $61 billion (£52 million) in revenue, has lined up financing from banks including Goldman Sachs Group Inc, while JPMorgan Chase & Co., Rothschild & Co. and Bank of America Corp. are among other banks advising or offering capital on a deal.
