Manchester United are currently in a weird place from an ownership perspective, and a new investor is looking to capitalise on future movements.
The “weird place” is because Man Utd might just be one of the only clubs in the world where the majority owners are completely absent, and the minority owners are handling day-to-day tasks.
Ineos are ruling with less than a 30% stake, while the Glazers benefit from that good structure with their majority stake.
A new investor has now entered the picture, and they could well stand to make bank on a future takeover as the deal is confirmed.
Are you happy with Ineos and Sir Jim Ratcliffe?
Boldhaven are new Man Utd investors – what it means
United have two classes of shares, where Class A shares have zero voting rights, while Class B shares have all the voting rights.
When the club is listed on the stock market, the trading happens between the Class A shares, which is also what held up Sir Jim Ratcliffe’s deal.
Class A investors wanted their fair share to be bought out, so the majority investors in Class A shares almost have a watchdog role.
Boldhaven have now become United’s second-largest institutional shareholder (Class A shares) after Ariel Investments in an interesting development.
United in Focus got in touch with GRV Media’s Head of Football Finance and Governance, Adam Williams, to break this deal down.
He said: “Behind Ariel Investments, Boldhaven are now the second largest institutional shareholder at Man United. Investors who’ve bought United stock do perhaps have a little more influence than people realise.
“The board has a fiduciary duty to act in their interests, for one. You could also have a situation whereby Boldhaven, Ariel or another large institutional shareholder becomes an activist shareholder and starts a campaign to force the club to change strategy. That’s purely a hypothetical at the moment, but it is possible, and it’s one of a number of plates that United have to spin in keeping their whole capital structure happy.
“I think the long-term play for the likes of Boldhaven is to wait for a full takeover. Minority shareholders have certain rights and, as part of the mechanics between Ratcliffe and the Glazers, are virtually guaranteed to get at least $33 per share in the event that a buyer wants to take the club private.
“In reality, if they did sell, they’d be looking for much more than that. $33 is the floor, not the ceiling. If a Sheikh comes in and wants to take United off the New York Stock Exchange, they’d likely need to offer the same price to the listed shareholders as they would to Ratcliffe and Ineos. So you’re looking at a massive return on your investment, probably more than 100 per cent.”
Making sense of the new investors
As it stands, the deal between the Glazers and Ratcliffe is iron-clad, and Ineos’ financial position isn’t such that they can contemplate a full takeover.
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However, the stock market rarely does anything without a reason, so a major investor coming on board perhaps hints at movement in the long term.
As Williams explains above, institutional shareholders stand to benefit massively with a huge return on their investment if they enter the bidding right now.
United are a club on the up, and the current arrangement is just not sustainable forever, so a full takeover is bound to happen at some point.
It won’t be a surprise if more investors get into this race, pre-empting a full takeover by either Ineos or a third party who lists the club off the stock market.
Either way, Boldhaven now stands alongside Ariel Investments as the investors with the most to gain from such a takeover.
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