LSE under pressure to stop trade in Manchester United stock

The London Stock Exchange is expected to come under pressure today to halt trading in shares of Manchester United, the company owning the Premiership football club, because of the danger of a false market being created.

Owing to the uncertainties surrounding the company, analysts believe it is becoming increasingly difficult to trade the shares on the basis of firm knowledge.

This follows last week's annual shareholders' meeting in which Malcolm Glazer, the entrepreneur who holds 28.1 per cent of Manchester United, joined other investors in voting three directors off the board. Mr Glazer has previously expressed a willingness to make a bid for Manchester United, but has no bid on the table at present.

However, a source close to the Glazer family confirmed yesterday that "the bottom line is, they are still interested in making an offer".

After Friday's meeting, Mr Glazer's corporate bank, JP Morgan, resigned because it would contemplate only a friendly deal with the Manchester United board. But the source said of the Glazer family: "It is only logical that they will have had a Plan B in the event of JP Morgan quitting. Finding a new bank is not going to be a problem. Finding the money is not going to be a problem."

A hostile bid for Manchester United would cost in the region of £800m, which Mr Glazer would have to offer in cash at a time when the US dollar is sinking to new lows against the pound. At current rates a bid of that size would cost nearly $1.5bn.

But the Manchester United board is helpless as long as Mr Glazer, who owns the Tampa Bay Buccaneers American football team in Florida, declines to make his intentions clear.

A spokesman for the company said yesterday that the directors are extremely keen to sit down with Mr Glazer and two Irishmen, JP McManus and John Magnier, to reach what he termed "some kind of sensible long-term solution". Messrs McManus and Magnier own a company, Cubic Expression, which holds 28.9 per cent of Manchester United shares, so together they and Mr Glazer account for a majority 57 per cent of the company.

The Manchester United board have made it clear that they would like the City Takeover Panel to intervene and force Mr Glazer to make his intentions clear. But as the company is not under offer, it has no formal reason to approach the panel. But the panel could respond to a request from the Stock Exchange or the Financial Services Authority, the official listings authority for companies quoted on the stock market.

Manchester United called off talks with Mr Glazer last month over a proposed offer, as the club said it would not support a bid that involved taking on a large amount of debt to finance the deal. On that basis it refused to give Mr Glazer or his advisers access to its detailed financial information, the process known as due diligence. Mr Glazer then made his threat to vote off the three directors up for re-election at Friday's meeting.

The club's fans are virulently opposed to a Glazer takeover because they are convinced it would not be in the interests of the club in playing terms. But the Glazer family associate said yesterday: "They didn't make the experience worse with Tampa Bay, and their view of sports is very much consumerist. They are pursuing Manchester United because they believe they can make it better."

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