Glazer accuses United board of failing its shareholders

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The Independent Online

The board of Manchester United was last night accused of "abdicating its fiduciary duty" to shareholders by calling a halt to takeover talks with the American businessman Malcolm Glazer.

In a Stock Exchange statement yesterday morning, United's board said it "would not support" the "overly leveraged" capital structure of a proposed offer from Mr Glazer.

Mr Glazer was last night understood to be outraged at the board's attitude. A source close to him said: "The board is abdicating its fiduciary duty by refusing to consider a proposal that offers good value to shareholders. The board has refused even to discuss the business plan and we feel they have slammed the door in our face. Shareholders have been denied the chance to explore the proposal."

The source claimed that during Mr Glazer's most recent round of stockpiling last week, there was "a wall of demand " from small institutions - who collectively own about 20 per cent of United - to sell to Mr Glazer at 285p per share. This was clear evidence, the source added, that Mr Glazer's proposed bid price of 300p was "a good offer". United shares fell 6p to 277.75p yesterday, valuing the club at £728m.

David Gill, United's chief executive, said the rationale in halting talks was that the proposed business plan "could be detrimental" to United's success. "The level of debt required was not in the best interests of the club going forward."

It has been widely assumed that Mr Glazer's planned borrowing would have been financed by cost-cutting on players and rises in ticket prices. Mr Glazer's camp has denied this, promising "significant" investment at a time of declining profitability for the club.

Manchester United is rare among football clubs in being debt-free and profitable. It has made a profit every year for the past decade.

Mr Gill is adamant that United will not overstretch itself. Mr Glazer, who resents the implication that could happen under him, is considering his next move. The 76-year-old owner of the Tampa Bay Buccaneers American football franchise recently raised his United stake to 28.11 per cent, sparking speculation of an imminent takeover.

His bid proposal, according to a source close to the situation, was presented to United's board on 27 September. It is understood that his buyout would have required £400m in loans, secured against United's future earnings, to finance a takeover costing about £800m.

United's board effectively nipped that plan in the bud by saying it "has decided to inform shareholders that it would regard an offer it believes to be overly leveraged as not being in the best interests of the company".