Ferguson under threat after Magnier increases stake

The Irish racing tycoons John Magnier and JP McManus yesterday increased their shareholding in Manchester United to more than a quarter of the company. The move will fuel fresh speculation about a takeover and renew doubts about the future of the club's manager, Sir Alex Ferguson. The increase provoked an immediate response from the fans' group, Shareholders United, who said they would fight any attempted takeover of the club's plc.

Cubic Expression Ltd, an investment vehicle owned by the Irishmen, confirmed it had bought 3.3m United shares to take its total to 66.5m, or 25.49 per cent of United.

Any investor who amasses a 30 per cent stake in a company is required to make a bid offer to all other shareholders. Cubic's latest investment pushes the shareholding of Magnier and McManus ­ which was already bigger than anyone else's ­ closer to that mark.

It has also increased the likelihood that the pair will seek representation on the board. A spokesman for Magnier said last night that he could not confirm or deny that Magnier will now request a seat on the board.

If such a request is forthcoming, it will probably be granted, adding power to the substance of Magnier's shareholding. This could spell trouble for Ferguson, who is involved in an increasingly bitter legal battle with Magnier over the lucrative stud rights to the racehorse Rock of Gibraltar.

At the moment, Magnier and McManus have little or no say in the running of United. A seat on the board would give them that power, allowing them, for example, to veto the offer of a new contract to Ferguson. That contract, thought to amount to a three-year extension after this season, is still unsigned.

Whether Magnier has any wish to destabilise Ferguson in such a way is open to debate. On the one hand, those close to Magnier insist that damaging Ferguson would be cavalier because Ferguson has underpinned United's success. Taking risks with his future would also risk Cubic's £180m investment in United.

On the other hand, Magnier cannot fathom why Ferguson is pursuing legal action over Rock of Gibraltar so doggedly. Their feud has become intensely personal. There was never any written agreement that Ferguson owned a share of the horse or any rights to stud fees, and he never contributed to training expenses or other costs. When the case comes to court in Ireland, probably in early 2006, Magnier will argue that he simply allowed the horse to run in Ferguson's colours as a goodwill gesture. He will also argue that Ferguson has no claim on Rock of Gibraltar's £16m annual stud revenue, which comes from 260 annual "covers" at £60,000 a time. As a settlement, Ferguson was offered the cash from four covers per year but turned it down.

A subsequent alleged smear campaign against Ferguson, using intelligence partly collated by Kroll, a firm of corporate investigators, has inflamed the situation.

Destabilising Ferguson would only make sense for Magnier and McManus if they have a takeover plan in the pipeline and a new manager in their sights. Whether they have is pure speculation but the pair are both close associates of Celtic's Irish millionaire owner, Dermot Desmond, who also owns just under three per cent of United. Desmond is also more aware than most about what it would take to tempt the Celtic manager, Martin O'Neill, south of the border.

Until Magnier makes his next move, such theories will continue to abound. United have long been the subject of takeover speculation, not least since Roman Abramovich bought Chelsea. Other parties said to be interested include the American sports entrepreneur, Malcolm Glazer, who owns the Tampa Bay Buccaneers and is United's second-biggest shareholder with 14.31 per cent.

Shareholders United, a group of several thousand small stakeholders, is determined to discourage a takeover. The group was formed to resist BSkyB's attempted takeover of United in 1999 and has warned it will stand in the way of any bid.

"All fans' groups and fans at our club are united in not wanting a takeover," an SU spokesman, Oliver Houston, said. "A single owner or block of owners in control would not be healthy. The opportunity for scrutiny and accountability would be lost and fans would have little chance of ever having a say in how their club is run.

"United is a 125-year-old community asset and should not be treated like a stock market placing. Media moguls, currency speculators, oil tycoons and the rest should take note: our club is not for sale.

"Fans who care about United's independence must join SU now and help build a blocking stake to prevent hostile or unwanted bids, and we very much hope that the club will aid us in this endeavour."

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