Sheikh Jassim bin Hamad Al Thani’s proposed takeover of Manchester United could result in an overpayment of up to £2.5 billion.
The Qatari banker is currently the favorite to become the next owner of the club, following the stalled bid from Sir Jim Ratcliffe, the INEOS chief.
YOU MAY ALSO LIKE: Hakim Ziyech’s Plans To Leave Chelsea Thwarted Yet Again
Sheikh Jassim is reportedly confident that he will be named the preferred bidder by the Glazers, who put the club up for sale in November.
The offer made by Sheikh Jassim is believed to be £5.5 billion for a complete takeover of Manchester United.
Out of this amount, approximately £1 billion will be used to clear the significant debt accumulated by the Glazers, with the remaining funds allocated to club and community projects.
If the sale goes through at £5.5 billion, it would make Manchester United the most expensive sports club in history.
However, it is argued that the actual value of the club lies between £3 billion and £3.4 billion.
The current owners of United are believed to have added a 20 percent premium to their shares.
Viva Mukherjee, a chartered accountant and football finance analyst, provided an explanation to Football Insider regarding the potential overpayment.
Mukherjee stated, “There are 54,500 ordinary A shareholders, and the Glazers own 110,000 class B shares at Manchester United.
“Today’s share price sits at around $25, but the market value has soared to over $26 when we have seen reports about Qatar winning the bid.
“If the Glazers sold at the same rate as the stock market, the value of the club would sit around £3 billion to £3.4 billion.”
Mukherjee believes that there is likely a premium attached to the Glazers’ shares due to their status as United’s controlling shareholders, which would raise the club’s value to between £3.4 billion and £3.9 billion.
He also considers Sheikh Jassim’s reported bid to be “well in excess of market value.” Mukherjee has taken into account the debt that Sheikh Jassim is willing to clear.
Forbes, a renowned valuation authority, ranks Manchester United as the second most valuable football club in the world after Real Madrid, valuing it at £4.8 billion.
Forbes’ valuation is based on factors such as matchday income (£790 million), broadcasting deals (£1.6 billion), commercial deals (£1.6 billion), and brand value (£790 million).
Rumors of a successful Sheikh Jassim bid have contributed to an increase in United’s share price.
Sheikh Jassim seems to be moving closer to becoming the preferred bidder, as some shareholders are against Ratcliffe’s bid.
Unlike Sheikh Jassim, Ratcliffe aims to purchase only the Glazer family’s shares and has not committed to clearing the existing debt.
Shareholders are concerned that the value of their shares may decrease if Ratcliffe’s bid is successful, which is not a concern with Sheikh Jassim’s offer, as he plans to buy them out.
YOU MAY ALSO LIKE: Sir Jim Ratcliffe Receives ‘Ultimatum’ To Restructure Takeover Bid
Ratcliffe needs to find a resolution to keep his hopes alive. Manchester United fans are eager to see the departure of the Glazers, who are widely unpopular as owners of the club.
The club’s manager, Erik ten Hag, also desires a resolution to the ongoing takeover saga, as the uncertainty could disrupt the team’s summer transfer business.
