Fans step up action as board sells up

Bill Wilson
BBC News business reporter

Mr Glazer is still hunting the remaining club shares

Manchester United fan's body Shareholders United is drawing up its strategy after the club's board advised shareholders to accept Malcolm Glazer's bid.

The US tycoon owns around 76.2% of Manchester United's shares and is offering 300p a share for the rest.

In a statement, the club board said unless shareholders had "strong non-financial reasons" for holding on to shares, they should accept the offer.

Shareholders United said the news was expected but they would "fight on".

Mr Glazer is now expected to take the club's shares off the London stockmarket by 30 June, as he owns more than 75% of the shares needed for such a move.

If he (Malcolm Glazer) is squeezed out in a few years we hope our fund will enable us to buy a large chunk of Manchester United Oliver Houston, Shareholders United See Man United's share price

Shareholders United said it now expects to launch its Phoenix Fund on 7 June, a financial fund offering "high interest".

If their boycott campaign to put a stranglehold on Manchester United's income is successful and Mr Glazer "is forced to sell-up" at Old Trafford, the group says it hopes to be in a position to buy back a sizeable share of the club.

'Reclaim the club'

The fans' group believes that Mr Glazer's business plan for the club, reliant as it is on heavy borrowing, is not workable.

More than one-third of Mr Glazer's £790m offer for the club is debt secured against United's assets, such as its Old Trafford stadium, while a further £275m comes from loans from three US hedge funds.

"We will be ready to reclaim the club if the Glazers are forced to sell," said Shareholders United spokesman Oliver Houston.

Now the board has decided to sell its shares to Mr Glazer

"If he is squeezed out in a few years we hope our fund will enable us to buy a large chunk of Manchester United."

Mr Houston said the fund was backed by Japanese bank Nomura.

Shareholders United will be writing to the 30,000 small shareholders in Manchester United, and also its 35,000 members, asking them to consider helping the fund.

"We cannot give financial advice on whether to sell their shares to Mr Glazer or not," said Mr Houston.

"But a lot of fans may decide to hang onto one share or a handful of shares as a symbolic gesture."

Shares worthless

Many fans bought for sentimental reasons and to have some sort of say in the running of their club.

"However some fans have more than 100,000 shares and we realise that it makes financial sense for them to sell," said Mr Houston.

"If fans do sell though, we would ask them to consider putting money into the Phoenix Fund - it would be very sweet in future to buy back the club using money that the Glazers have paid out to buy the remaining shares."

United fans can put the squeeze on the parasitic Glazer Oliver Houston, Shareholders United United board accepts Glazer bid

If fans did hang onto their shares, they would be virtually worthless as there would be no guarantee that dividends would be paid by the Glazer family, and it would also be difficult to trade the shares.

However, owning a single share should allow a fan to attend any Extraordinary General Meetings held by the club.

The Manchester United board has indicated that it plans to sell its own shares to Mr Glazer and has encouraged other investors to do the same.

Board members going

With ownership of more than 75% of the club's shares, Mr Glazer is allowed write off his debt on the club's books and take it private after 14 years on the London stockmarket.

Mr Glazer hopes to secure enough additional shares in the club to take his stake up to 90%, the level at which remaining shareholders can be legally compelled to sell.

But regardless of whether the remaining shareholders sell up or not, United's time as a publicly-listed company is bound to come to an end, so shareholders are being encouraged by the board not to hold onto shares purely for sentimental reasons.

It remains to be seen how many will hang onto their stakeholding

The offer to sell shares in the world's richest football club to Red Football - Mr Glazer's acquisition vehicle - is due to close at 1500 (1400 GMT) on 13 June.

After that time, Mr Glazer says, he may not buy their shares any more, rendering remaining stock null and void and effectively worth little beyond sentimental value.

In a letter to shareholders, Man United Chairman, Sir Roy Gardner announced his impending resignation, along with that of non-executive directors Ian Much and Jim O'Neill.

However Shareholders United will be writing to chief executive David Gill asking him how the remaining members of the board can stay in place "in all conscience" after selling their shares to the Glazers.

Legal moves

Shareholders United's latest move to hit the club's sponsors and plug Manchester United's revenue stream is to urge fans to terminate their mobile phone contracts with shirt sponsors Vodafone, and sign up to other networks.

The group says it has struck a deal with two corporate communications firms which will net its campaign around £60 for each completed switch.

Meanwhile, lawyers are also being consulted on the legality of Mr Glazer transferring his debt onto the club's books, the fans' body said.

Manchester United's legal status will have to be changed before Mr Glazer can use the club's assets as security for the money he is borrowing.

Shareholders accounting for 5% or more of the shares can legally apply to a court to stop this.