Bankers give fresh impetus to Glazer's latest bid

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The Independent Online

Malcolm Glazer's latest attempt to buy Manchester United was boosted yesterday as it emerged that his former backers, investment bankers JP Morgan, who dumped him last year, would be prepared to provide finance for a non-hostile takeover.

Malcolm Glazer's latest attempt to buy Manchester United was boosted yesterday as it emerged that his former backers, investment bankers JP Morgan, who dumped him last year, would be prepared to provide finance for a non-hostile takeover.

Under Glazer's original £800m buyout plan JP Morgan was prepared to lend up to £500m. But the bank cut its ties with Glazer when the American's aggressive stance led to three United directors being voted off the board at last year's AGM. The board had angered him by refusing to support a highly leveraged bid - one that was heavily reliant on borrowing - for the club.

Last week it was confirmed that Glazer had appointed another bank, NM Rothschild, to advise him on a new offer for United, although Rothschild will not be raising funds. It now appears that JP Morgan is prepared to do a U-turn to fund Glazer as long as he can agree a "friendly" deal with United.

"They would be prepared to do that if the deal happens," said a source close to the situation.

Glazer has struggled to find alternative backers since JP Morgan ditched him, but this development erases doubts over whether he has the financial clout to buy United.

Yet plenty of hurdles remain, not least the structure of any proposal. Unless a new offer is significantly less reliant on debt, there is no reason United's board would back it. The club is profitable and debt-free, and David Gill, United's chief executive, has already made it clear he will not support a highly leveraged bid.

Though Glazer has remained stubbornly uncommunicative about his ambitions for United, it is not outside the realms of possibility that a new offer could be largely self-financed. But the fact that he wants to borrow from JP Morgan suggests significant debt is still part of his plan, which would seem to make it intrinsically unattractive to the board. Without board support, there can be no friendly deal, and hence no finance.

United have also made it clear that they will not hold any further takeover talks with Glazer until he puts a firm offer on the table. The same is understood to be true of United's biggest shareholders, John Magnier and J P McManus. The Irishmen remain key to any Glazer takeover, but will not re-open talks about selling their 28.89 per cent stake until a no-strings cash offer is made.

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