From The Times
Red Knights plan to buy Manchester United
Red Knights plan to buy Manchester United
March 2, 2010
Oliver Kay, Football Correspondent
A close friend of Sir Alex Ferguson is among group of top financiers hoping to wrestle Old Trafford club from Glazer family
Jim ONeill, a close friend of Sir Alex Ferguson, emerged last night as a key player among the Red Knights, who hope to wrestle Manchester United from the clutches of the Glazer family.
As details emerged of the first tentative meeting between the group of leading City financiers who plan to put together a consortium to buy United, the name of ONeill, who briefly served as a director at Old Trafford and has strong ties with Ferguson, figured prominently.
There is no indication that Ferguson, who has been outspoken in his public support of the much-loathed Glazer regime, has had any contact with the group, but the involvement of ONeill, the head of global economic research at Goldman Sachs and a lifelong United supporter, is certain to attract his attention if the campaign progresses beyond yesterdays meeting at the Fleet Street offices of Freshfields Bruckhaus Deringer.
United fans, many wearing green and gold scarves, show their disenchantment with the Glazer family at Sunday's Carling Cup final. Picture Courtesy of TimesOnline.
Also present at the meeting were Keith Harris, the chief executive of Seymour Pierce, and Mark Rawlinson, a senior partner at Freshfields, the legal firm that advised United before and during the Glazer familys hostile takeover in 2005. Other prominent figures who have expressed support for the campaign include Paul Marshall, the co-founder and chairman of Marshall Wace, one of the Citys largest hedge funds, and Richard Hytner, the deputy chairman worldwide of Saatchi & Saatchi and a co-founder of the Shareholders United group that fiercely opposed the Glazer takeover.
Their plan is to use their contacts across the world to find a number of super-investors who could raise the money estimated at a minimum of £1 billion needed to make a bid to buy the club from the Glazers. They hope that some of that money would come from supporters groups, who would in turn be offered a golden share and the prospect of some representation in any new regime.
Sources were keen to play down the significance of yesterdays meeting, suggesting that it was merely the first step on a long road that may not lead anywhere, but there is a genuine belief among some of those involved that it will be possible to persuade the Glazer family to sell United. Harris has indicated in the past that he believes the club to be worth approximately £1 billion, but the Glazers valuation, which they maintain does not equate to an asking price, is approximately £1.2 billion.
Significantly, the Red Knights are understood to have secured the full backing of the Manchester United Supporters Trust (MUST), the group that was formed from the ashes of the Shareholders United movement. In recent weeks, since it emerged that Uniteds debt had soared to an astonishing £715 million, the ranks of MUSTs membership have swollen dramatically, with supporters increasingly vocal and visible, wearing the green-and-gold colours of Newton Heath, which predated United in their defiance towards the Glazer regime.
A spokesman for the Glazers responded last night to news of the meeting by stating: Manchester United is not for sale. The same message was conveyed in December after tentative interest from a Chinese consortium, whose backers were never identified.
Since then, the Glazers have taken the significant step of launching a bond issue to raise £500 million to reduce the clubs debts, with more than 50 low-risk investors from around the world stumping up cash at a fixed annual interest rate of 9 per cent. However, United remain under threat from their PIK (payment in kind) debt of £202.1 million, which rolls up at an annual interest rate of 14.25 per cent and is understood to be spread between 20 vulture funds with appetite for high-risk funds. The PIK debt threatens to rise to £588 million by 2017.
Although United remain successful on the pitch, the club paid £41.2 million in bank interest in the last financial year, a situation that the Red Knights regard as unsustainable and untenable.