Sir Jim Ratcliffe’s attempt to purchase Manchester United seems to have suffered another setback according to a recent report.
The Qatari group led by Sheikh Jassim is reportedly growing more confident about securing a deal.
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Despite several deadlines set by the Raine Group, who is overseeing the club’s sale on behalf of the Glazer Family, the takeover remains unresolved.
However, the Qatari Group is increasingly optimistic about acquiring one of the world’s largest football clubs.
The process has been ongoing for eight months since the initial bid deadline in February. Both leading bidders have faced delays as they aim to meet the Glazers’ asking price of £6 billion.
Now, complications have arisen regarding the concerns of minority stakeholders in the club.
According to reports, the Qataris are gaining confidence, while Sir Jim Ratcliffe, the chairman of INEOS, has been given an ultimatum to restructure his bid.
This further suggests that Ratcliffe’s current offer involves purchasing the Glazer family’s 69 percent share but does not include anything for the minority shareholders.
This raises the possibility of legal action. In contrast, Sheikh Jassim’s Qatari offer is believed to be structured to acquire the club in its entirety, making him the sole owner.
If Ratcliffe were to take over, current minority shareholders might receive discounted shares but would have no say in whether the Glazer family sells their shares.
This is due to the club’s listing on the New York Stock Exchange.
As the Glazers own 69 percent of the shares in Manchester United, they can push through a deal without approval from their minority partners.
Ratcliffe’s need to restructure his proposal arises from the threat of litigation from existing minority shareholders.
The reports suggest that Sheikh Jassim is now the only serious bidder, rendering Ratcliffe’s proposal unlikely to succeed.
Dr. Naaguesh Appadu, a senior research fellow at Bayes Business School, provided an explanation earlier this year.
He stated that if a firm is listed on the UK stock exchange, acquiring 75 percent of the shares allows for delisting, and at 90 percent ownership, the remaining 10 percent can be squeezed out.
However, on the US stock exchange, owning 51 percent is sufficient for a firm to make decisions about the remaining shareholdings.
If there is a proposition to acquire more than 51 percent, the 31 percent minority shareholders would have no say.
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In the case of Manchester United, if some of the 31 percent minority shareholders refuse to sell their shares, whoever purchases the Glazers’ 69 percent would still control the company and its shareholdings.
If the remaining shareholders later decide to sell their shares, it would be at the original price, as they had the choice to sell but did not exercise it.
