Glazer signals intentions by opening talks with new bank

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Malcolm Glazer's intention to make a hostile bid for Manchester United was underlined yesterday as he held talks with Deutsche Bank about financing a deal.

Malcolm Glazer's intention to make a hostile bid for Manchester United was underlined yesterday as he held talks with Deutsche Bank about financing a deal. While Deutsche have not yet agreed, a source close to the talks said a deal "could have legs", and the timing of the talks alone shows Glazer's determination. It was only last Friday that his previous bankers, J P Morgan, dumped Glazer because of the belligerence of his approach to United.

United's urgent wish for clarification of his intentions came no closer to being fulfilled yesterday. Reports over the weekend had suggested that United's board would ask the Takeover Panel - the City's regulatory body for such matters - to force Glazer, 76, to "put up or shut up" over any planned bid. But the Panel would only make such a move during an "offer period" for the club, which is not the case now, and has no intention of pressuring the American.

United could not even argue to the Panel yesterday that there were exceptional circumstances. Though the club's share price fell 7.25p, or 2.5 per cent, to 278.25p, it hardly constituted a dive. Until the market becomes demonstrably more jittery, or there is substantial evidence of takeover movement, United will be left seeking their own clarification from Glazer. The board admitted on Friday that this is now of "critical importance" but has been unable to get Glazer to come clean so far.

One US-based source, an associate of Glazer, has made it clear in recent days that Glazer's ambition to own United did not end when J P Morgan and Brunswick, Glazer's PR firm, both withdrew their support on Friday. They did so after Glazer used his 28.11 per cent stake in United to vote against the re-election of three club directors at the AGM.

Some City analysts believe that if J P Morgan had been prepared to provide up to £500m for a takeover - of a company worth around £800m - there must have been grounds for confidence in the financial plan. Others point out that Glazer's attitude, which directly led to J P Morgan dumping him, could also dissuade other backers.

"We can't work out whether Malcolm Glazer is totally loopy or has some brilliant plan that's not apparent to anyone else," said one City observer, who is close to the situation.

One key fact remains unchanged. If Glazer wants United, he must first do a deal with the club's major shareholders, John Magnier and J P McManus. The Irishmen own 28.89 per cent of the club through their Cubic Expression company, but have not spoken to Glazer's camp since calling a halt to talks in mid-October.

Cubic would sell, if the price and conditions were right, but Glazer has yet to table a firm, attractive offer. His original offer, at 300p a share, was made on the basis that he would only complete the purchase once he was assured of buying 75 per cent of United. Short of that figure, he would not have effective, outright control, or any chance of de-listing the company from the Stock Exchange, which is his intention.

Coming to an arrangement with Cubic is just one hurdle. Another is that no banker is likely to lend without access to the club's books. Glazer could press for a seat on the board, probably for one of his sons, Joel or Avi.

This would bring access to the books, but Glazer has yet to make such a move. United's board, already wary of writing off Glazer, were warned last night to "expect the unexpected" from him. The advice came from Keith Harris, the former chairman of the Football League who is also advising United fans about building a "blocking" stake in United.

"Glazer has been cornered before but come out fighting," Harris said. "He is an unpredictable character, and I think possibly what he is going to do is do something we cannot predict."

Harris is currently working with the influential Manchester fans' group, Shareholders United, in trying to build a 25 per cent blocking stake that could not prevent Glazer taking control but would subject him to the type of scrutiny that could deter a takeover attempt.

"If we could get 25 per cent, it would send out a signal that Manchester United is not for sale," Harris said.

"We have made significant progress against an ever-changing background, which is not the best way to work. But we don't want this man to come near us."

Key questions in United's takeover saga

Has the running of Manchester United been drastically undermined by Malcolm Glazer forcing three directors off the board at last Friday's annual meeting?

No. The loss from the board of Andy Anson (commercial director), Maurice Watkins (non-executive director) and Philip Yea (independent non-executive director) was far from ideal, and exemplified Glazer's power to disrupt. But Anson and Watkins remain at the club as do four directors: Sir Roy Gardner, the non-executive chairman, David Gill, the chief executive, Nick Humby, the group finance director, and Ian Much, an independent non-executive director. United took legal advice yesterday about the board's make-up and were told that four directors will suffice.

How can more directors be voted onto the board?

United can appoint as they see fit, without a prior vote, although this would need to be ratified by a vote at the next annual meeting or at any earlier emergency meeting. Even before Friday, the club was looking for another non-executive director and that search continues.

Can Glazer veto any appointments?

Yes, but only if, as on Friday, voting turn-out is so low that his 28 per cent holding equates to a majority of votes cast. He can also request board representation, but there is no guarantee that any nominee would gain or keep a seat.

Why did the club's major shareholders, John Magnier and JP McManus, abstain from Friday's vote?

The Irishmen, who own 28.89 per cent of United via their Cubic Expression company, have always abstained from voting, on any issues.

What will be Glazer's next move?

If he still wants United, he needs to find new bankers, and do a deal with Cubic, whose holding is crucial to his ambitions.

Why does he want United?

Money. He thinks the club can be a cash cow, especially if it can do its own TV deals at some point in the future.