Fuck tabloids, read proper newspapers

Yes yes I know some of you are bored to tears but all this takeover talk, but trust me, its way more interesting than my life right now. Unless you all want to hear about indifference curves, budget constraints, Phillips curves, monetary rules, CAPM, product life cycle theory, Microsoft, Who gains and who loses in free trade blah blah, then I will gladly oblige...

From Sunday Times:

May 01, 2005

Taken on trust

Jonathan Northcroft

A Japanese bank gives Manchester United fans a chance to send Malcolm Glazer packing and call the shots at the club

The Manchester United website is full of ways for fans to enmesh their lives with their club. Click here to get a Manchester United credit card, there for a personal loan. Follow this link to have Manchester United broadband piped into you home, that one to enter a competition for a visit behind the scenes at Carrington. No sporting outfit in Europe is so adept at getting people to pay for the illusion of involvement.

Yet supporters can now do something that would guarantee them a very real means to participate in United: they can call the shots at their club. Short of pulling on the red shirt itself, or assuming Sir Alex Ferguson’s place, it is hard to imagine anything beating that. Six weeks ago, The Sunday Times revealed a plan by supporters to buy a share of power at Old Trafford with the immediate aim of warding off Malcolm Glazer, but the long-term strategy of giving ordinary fans a veto over major decision-making at United in perpetuity. A common, and understandable, reaction was: nice idea but where will they get the money? Not for the first time, campaigning United fans are poised to confound expectation.

Shareholders United (SU) and the Independent Manchester United Supporters Association (IMUSA), the groups leading the fight against the American tycoon, have secured the backing of Nomura, the leading investment bank, which has agreed to lend them up to £100m to finance their scheme to acquire up to 25% of United shares and block Glazer’s take-over attempt. From Tuesday, United’s 30,000 individual shareholders, who account for an estimated 18% of the club’s ownership, will receive letters asking if they would be willing to join a new fans’ investment trust. This is aimed at creating a collective bloc of equity in the hands of supporters. Fans who have cash, but no shares, will also be able to join.

In a statement confirming Nomura’s involvement, agreed with the bank, SU and IMUSA said they “are in active discussions with the asset finance group at Nomura about ways in which supporter-shareholders can help build a collective stake in Manchester United plc and keep the club independent.”

Nomura are prepared to lend on a pound for pound basis, meaning that for every £1 of United shares or cash committed to the trust, the bank would offer to double it. Rather like a mortgage, the fans would then repay Nomura over a period of many years, using the annual dividends paid by United’s board to shareholders. One of the beauties of the scheme is that units in the trust will be tradeable so that fans needing to sell up could. It is hoped several “red knights” — wealthy United supporters who have expressed an interest in saving the club from Glazer — will join in with significant funds. Fans are appealing to high-profile United lovers, such as actors and pop stars, and perhaps even football figures such as Gary Neville and Ferguson himself, to come on board.

The supporters’ previous plan had been to acquire 25% through a “tender offer”, funded by many thousands of fans taking out personal loans. Now with a heavyweight like Nomura behind them, and the promise of a large amount of money at their disposal, the fans have suddenly become serious players. Everything rests on the response to their mailshot, which will particularly target the 7,000 individual United shareholders — including director Maurice Watkins — who hold 1,000 or more shares and account for around 13% of the club. Previously SU, with a 26,500 membership and definite control over 2% of the club, have estimated they could gain support from enough individual shareholders — many normal United fans who may have had shares in the family for years, or invested through love of their club — to take them up to 10%. Now they are about to find out.

“Our interest is in helping supporters protect the club from predators,” said Gary Wilder, head of Nomura’s Asset Finance Group. “However, we can only move forward if supporters show they are interested.”

Nick Towle, the SU chairman, said: “This is the moment of truth. We want all United supporter-shareholders, small or large, rich or poor, to get behind the trust and help keep the club free from predators.”

The fans’ actions come at a critical point in Glazer’s bid. Last Thursday the Takeover Panel issued him with a “put up or shut up” ultimatum, giving him until midday on May 17 to declare whether he intends to bid for United. The Florida tycoon, who owns a 28.1% stake, has been in talks over an £800m or 300p-a-share offer for the football club, but United chief executive David Gill and his plc board at Old Trafford have refused to recommend his business plan, describing it as “aggressive” and criticising the huge debt involved. A key to success for the tycoon is buying out the Irish racing magnates John Magnier and JP McManus, who hold a 28.9% stake but, contrary to some reports, it is understood Glazer has yet to talk to the Irishmen.

The fans want a 25% stake because anyone who wants to make a fundamental change to the running of a business requires a 75.1% vote to pass special resolutions at an EGM, and Glazer would need this to transfer the amount he is proposing to borrow — a large proportion of the further £540m he needs to buy United — to the club. However, SU are being advised that 10% is likely to be enough to foil the American. The minimum the fans need from their mailshot, which will be followed up by phone calls from a professional company acting for free, is a further 3% of shareholders to express interest in joining the investment trust. Added to SU’s 2% this would give them a starting block of 5% that could be doubled using Nomura’s money.

The supporters, who have been talking to the Japanese-owned bank for more than six months, with the full knowledge of the Takeover Panel and, latterly, Gill and his board, referred to the Nomura scheme as “Project Excalibur” in communications and correspondence.

SU have written to Magnier and McManus, begging them not to sell to Glazer and offering to buy a proportion of their holding. The Irish duo, through their vehicle Cubic Expression, have always claimed to be long-term investors and their refusal — so far — to jump at Glazer’s offer has delighted supporters who previously viewed them as profiteers. Others with United stakes, such as the Scottish mining magnate Harry Dobson , who holds 6%, are thought to be in more of a hurry to sell, and Dobson is someone the fans may target with an offer.

With 25% the fans could ask for a seat on the board but they would not have the power to make major football decisions such as setting the transfer budget or appointing a new manager.

“That’s not our interest,” said SU spokesman Oliver Houston. “This is not about taking control so we can make the club spend £40m on a new goalkeeper. We’d want to leave the corporate side to professionals like David Gill and the football side to professionals like Sir Alex Ferguson. We’re not luddites. We’re shareholders who also want United to make buckets of money — we just want the club to be independent and run in the right way.”

Nevertheless, 25% would give supporters serious weight when it came to issues such as ticket prices, the expansion of Old Trafford and, indeed, certain football affairs. With their similar stake Cubic were able to force an inquiry into United’s transfer dealings and influence a decision to reduce the length left of Ferguson’s contract.

Glazer, with 28.1%, has already been able to vote directors off the board.

United fans, who previously fought off Rupert Murdoch, have played a leading role in the growth of supporter power in England, and should they acquire power Houston hopes it would encourage fans at other clubs to do similar.

Pleading for United followers to commit to the new investment trust, he said: “Our need is great, the time is now. This is an opportunity we can’t let slip through our fingers. Over United’s 127-year history you think of all the defining events, the second world war bombing of Old Trafford, Munich, the first European Cup, the Treble in 1999 — without wishing to sound pompous, this could be another of them.”

SU will this week launch a fundraising drive beginning with the issue of 100,000 “MUFC: Not For Sale” wristbands which they hope to place on sale through major retailers such as Virgin, WH Smith and JJB Sports and perhaps even persuade United players to wear.

Towle added: “The trust will be active buyers of United shares within a short space of time and, as the trust grows, hopefully for the foreseeable future. If Mr Glazer is interested in selling his shares we will be happy to talk to him.”

For further information, see www.ShareholdersUnited.org