Red Knights 'to drop £1bn Man Utd bid'

A consortium of businessmen tipped as possible buyers of Manchester United will shelve plans to make an offer, a report says.

The Red Knights were expected to make a bid of about £1bn in the coming weeks.

But the Sunday Times said this had been put on ice after investors baulked at the club's valuation.



 Manchester United has said it is not for sale and that the Glazer family owners would "not entertain any offers". The Glazers are said to value the club at £1.5bn.

The paper cited sources close to the Red Knights saying that the club's debts, the lack of money spent on players in recent years and rumours of manager Sir Alex Ferguson being close to retirement meant there was "a lot more downside than upside".

Revenues increased

 On Friday the club announced a cut in debt from £543.3m a year ago to £520.9m for the January to March period. In Man Utd's quarterly financial results, the figures also showed net assets of £794.9m and a cash balance of £95.9m.

The Old Trafford club said that in the nine months to March, year-on-year revenues were up 13.5% from £193.3m to £219.3m. It also reported that quarterly match-day, commercial and media revenues had increased on three months ago. However, losses for the quarter were up from £5.87m to £65.94m, mostly relating to various financing charges and costs.

Debts

 Manchester United was bought by the Glazer family for £800m in 2005. In the 2009/10 season the club finished second to Chelsea in the Premier League. They were also knocked out of the Champions League in the quarter finals, and have ended the season relatively unsuccessfully by their standards, winning only the League Cup.

Critics say the family has saddled United with massive debts, and the Red Knights have said that one of their priorities is to reduce debt levels. Earlier this year the club launched a seven-year £538m bond that enabled them to refinance much of their more costly debt.

Fans have launched a campaign to oust the Glazers, many boycotting the traditional red shirts and scarves and instead wearing green and gold, the original colours of Newton Heath, the amateur side which was founded in 1878 and became Manchester United.
However, the club does not believe it has fully maximised its revenue streams from global commercial opportunities.

Red Knights unlikely to make bid for Man United

The Red Knights have "unofficially" decided against making a bid to buy Manchester United from the Glazer family.

Publicly, the Red Knights continue to suggest that they will battle, but one insider has broken ranks to voice fears that an offer will never get off the ground, as it would be rejected out of hand in any case.
A source close to the consortium confirmed to Soccernet that the Red Knights would only ever offer £1 billion for the Old Trafford club, which falls short of the £1.5 billion valuation the Glazers are said to have put on the world's most prized football club.

The City of London operative said: "The Red Knights offer was virtually dead in the water the moment it was leaked months ago. If the Red Knights have had the chance to quietly present their case to the Glazers, it might have been a different story, who knows? But the way it leaked out, made it appear a hostile bid, and aggressive approach and it was never going to succeed that way.

"The leaking of a so-called bid for £1.5 billion clearly sent out the signal that the club was not for sale, and that the Red Knights were wasting their time. The Red Knights would never have offered more than £1 billion so it is never going to be worth even making a bid, so in my view there will not be one now."
Alongside Goldman Sachs chief economist and former United director Jim O'Neill, former Football League chairman Keith Harris, of investment bank Seymour Pierce, has been the most public face of Red Knights but when asked whether he would now make an official comment about the status of a bid, the City insider added: "That is highly unlikely. But there seems little prospect of the Red Knights mowing forward with an offer, that is for sure."

Soccernet broke the story that the Glazers turned down £1.5 billion at the turn of the year from a Middle East consortium and one from China. Since then, it has been widely reported in the UK media that there was a £1.5 billion offer, but Soccernet sources have confirmed the bid was actually for £1.2 billion cash, and that indications were that a £1.5 billlion cash offer could entice the Glazers to think about selling.
In opposition to that view of any potential bid, other sources close to the affair have suggested that the Red Knights are continuing to work towards lodging a bid and that getting in excess of 40 wealthy individuals to not only put their money to such an ambitious project, but also agree a unified plan of attack was always likely to be fraught with difficulty, especially considering some recent logistical issues.

Travel problems caused by the volcanic ash escaping from Iceland are said to have prevented the main players being able to be in the same room together yet "talks have been going better than ever and are progressing very positively", a Red Knights source told the Press Association.
Whatever the truth of either viewpoint it appears that, for the time being, the "not for sale" sign remains firmly up at Old Trafford as the Glazer family publicly retain their standpoint of being committed to owning the club and maximising its commercial capabilities.