Exclusive-Ratcliffe would pay more than $1.5 billion for 25% Manchester United stake-source

By Anirban Sen

(Reuters) -Ineos Chair Jim Ratcliffe would pay over $1.5 billion for a 25% stake in Manchester United Plc were his bid for the iconic soccer club to be accepted by the Glazer family that controls it, a person familiar with the matter said on Sunday.

The terms of Ratcliffe’s bid, reported here for the first time, infer a valuation on Manchester United of close to $6.5 billion, excluding its net debt of more than $600 million, the source said.

That is slightly higher than a rival offer from Qatar’s Sheikh Jassim bin Hamad al Thani for $100% of the Premier League club. Manchester United is currently valued by the stock market at $3.3 billion.

Sheikh Jassim informed the Glazer family in the last few days that he would not be raising his bid further. The Glazers have not yet reached a deal with Ratcliffe and negotiations may continue at least until the end of the month, the source said.

The Glazer family, which made its fortune in real estate, retail and healthcare and also owns the NFL’s Tampa Bay Buccaneers, bought the team for 790 million pounds ($960 million) in 2005. The six descendants of American businessman Malcolm Glazer, who died in 2014, together control 96% of Manchester United’s voting stock.

The deal structure that Ratcliffe has proposed would allow members of the Glazer family, as well as other shareholders, to partially cash out, the source said.

Ratcliffe has offered to be in charge of hiring and managing talent at Manchester United should his bid prevail, the source said. Some club fans have criticized the Glazers over the years over their handling of this key aspect of Manchester United’s operations.

The source requested anonymity because the matter is confidential. Manchester United and Ratcliffe did not immediately respond to a request for comment.

Ratcliffe founded Ineos in 1998 and is the chemical group’s chairman and chief executive officer, with a two-thirds stake. Forbes pegs Ratcliffe’s net worth at $18.7 billion.

The British billionaire is no stranger to the business of sports. Ineos owns French Ligue 1 club Nice, Swiss Super League side FC Lausanne-Sport, and works with partner club Racing Club Abidjan of Ivory Coast Ligue One. It is also behind the Grenadiers, one of the world’s most successful cycling teams.

The Glazers’ valuation expectations have been aggressive based on other soccer deals. Last year, the $3.1 billion acquisition of Chelsea Football Club by an investment group led by Todd Boehly and Clearlake Capital valued it at 5.7 times revenue for its last financial year.

The valuation proposed by Ratcliffe is equivalent to more than 11 times Manchester United’s revenue over the last 12 months, according to LSEG data.

The club announced in November 2022 that the Glazers were exploring cashing out on their ownership.

Record 20-time English champions, Manchester United has over 650 million fans worldwide, according to market research firm Kantar. A large number of them have been clamoring for a change of ownership.

That is because the Glazers have overseen a significant downturn in the club’s fortunes, with the club winning just the last of their 20 top-flight titles.

Manchester United won the League Cup under Erik ten Hag this season, but their third-place finish in the league, 14 points behind local rivals and treble winners Manchester City, underscores the scale of the turnaround required.