Manchester United shares drop 6% as bidders get extra time for new offers

Prospective bidders have been given extra time to make their offers to buy Manchester United.

David Hellier and Giles Turner

Bidders for Manchester United Plc have been granted extra time to table new offers, people with knowledge of the matter said, in a late twist to the sale of the world-famous football club.

New York-based investment bank Raine Group, which is managing the sale on behalf of the American Glazer family, initially set a deadline of 9pm last night for revised bids only to extend this late in the day, according to the people.

A Qatari consortium, led by Sheikh Jassim Bin Hamad JJ Al Thani, had already tabled an improved offer above its initial £4.5 billion ($5.5 billion) debt-free bid for Manchester United but is now free to make further adjustments to this proposal, one of the people said.

The Middle East bid group's main rival is British billionaire and fan of the club Jim Ratcliffe, who is expected to increase his first offer of less than £4.5 billion, according to the people. Sky News earlier reported the extension to the bid deadline, citing an unidentified person.

While Sheikh Jassim and Ratcliffe are the only two parties to have publicly declared interest buying Manchester United, the unexpected extension means it's still possible other suitors will enter the fray, the people said, asking not to be identified discussing confidential information.

US hedge fund Elliott Investment Management is willing to provide financing on a deal for the club, including one that involves the Glazers. Alternative asset managers Ares Management LLC and Oaktree Capital Group are also open to offering funds to back new investment in Manchester United, the people said.

Shares of Manchester United closed 6.7% higher at $25.62 in New York yesterday, giving the company a market value of $4.2 billion. The stock dropped as much as 6% in premarket trading today.

Ratcliffe, the founder of chemicals company Ineos Group, has already lined up financing from banks including Goldman Sachs Group Inc. for his offer. Ratcliffe's team remain confident about raising the money for a takeover of Manchester United despite recent turmoil in the debt markets, one person said.

There is growing concern in some quarters that the Glazers, who have owned the club since 2005, will ultimately decide against an outright sale and instead strike a deal with investors that will let them remain in charge, according to the people.

Any transaction could potentially rank as the largest ever deal involving a sports franchise, surpassing the $4.65 billion paid last year by a group led by Walmart Inc. heir Rob Walton for the Denver Broncos National Football League team.

MUST, an influential Manchester United supporters' group, has urged the Glazers to be realistic on price. "They know United needs capital investment, that's one of the reasons they are selling," said Chris Rumfitt of the group. "So they should make sure that the capital requirement is factored into the sale price."

Representatives for Ares, Oaktree, Ratcliffe, Sheikh Jassim and Manchester United declined to comment, while a spokesperson for Raine couldn't immediately be reached for comment.