By Jo Anne Bladd
Gulf state said to be haggling over price of Premiership club, offering £1.6bn for takeover
Bonds of Manchester United rose to a record high amid
speculation the 18-time English soccer champion may be sold to the Qatari royal
Manchester United’s £250m of 8.75 percent notes due 2017 have
gained 5.59 pence since February 8, amid media speculation that the club is in
talks with Qatar Holding for a sale.
“A lot of investors
expect the Qatar deal to happen now,” said Jonathan Moore, an analyst at
Evolution Securities Ltd. in London. “As a result, you would have a stronger
owner financially with no real concerns about them taking cash out of the club.
“Plus, a new owner might decide to take out the bonds, which
would mean paying a premium.”
The Qataris were offering £1.6bn, compared with the £1.8bn demanded
by the Glazer family, the current owners, the Daily Mail reported February 13.
Club CEO David Gill told Arabian Business in January that
the brand is worth close to $2bn.
Philip Townsend, a spokesman for Manchester United and its
owners, said no approach has been made to buy the club, and the team isn’t for
The Glazers, who loaded the club with debt in their 2005
leveraged buyout, are unpopular with Manchester United fans because of the
strain they’ve put on the team’s finances.
The club also has $425m of bonds due 2017.
The team has been the best performer in the Premier League
since the Glazer’s 2005 takeover, winning three straight championships between
2007 and 2009 and the 2008 Champions League.
Still, United, which tops the table this year, is overpriced
at £1.6bn, according to Stephen Schechter, founder of London-based investment
bank Schechter Co, a sport finance firm that has helped soccer teams including
Newcastle United, Southampton and Germany’s Schalke raise money.
“I don’t know today who has the horsepower to buy it,” he
said. “I thought the Glazers paid top dollar when they bought it. So if you add
15, 20 percent to that, that’s its maximum. I don’t think it’s worth more.”
Bond holders should cash in while the price is high,
Schechter said. “If I saw a bid of 110 I’d sell because until the deal is
closed there’s no guarantee that it’s going to close,” he said.