John Magnier and JP McManus yesterday moved a significant step closer to taking de facto charge of Manchester United when they increased their stake in the club to 28.89 per cent. The Irish racing tycoons paid £20.8m to buy 8m shares, equating to just over three per cent of the club, from the Dutch media magnate John de Mol. Their shareholding now stands within easy striking distance of the 30 per cent holding that would automatically trigger a takeover offer.
Significantly, The Independent can reveal, Cubic Expression, the investment vehicle of Magnier and McManus, was offered the chance to buy De Mol's entire holding of 11m shares. With small packages of other shares available to Cubic on Tuesday, the 30 per cent level required to trigger a takeover could have been reached then. Cubic declined the opportunity, preferring, for the moment, to work towards reconciliation with United's board and a greater day-to-day say in the club without having to buy it outright.
It is understood that Cubic will now actively seek two or three seats on the board. The request could come at any stage within the next couple of months. United, not least the chairman, Sir Roy Gardner, and the chief executive, David Gill, will shortly enter talks to discuss the matter. "We listen to all our shareholders and discuss any issues that concern them," a source close to the club said.
At the moment, Magnier and McManus have no effective power at Old Trafford. Their campaign for greater transparency to the way the club has been run has borne some fruit. United have undertaken an internal investigation into recent transfer dealings and also bowed to pressure not to give Sir Alex Ferguson a long-term extension to his management contract. But Cubic still has no say in everyday decisions about policy, spending or expansion of the business.
If Magnier and McManus gain seats on the board, for hand-picked representatives if not themselves, all that will change. Currently there is a six-man board comprised of three executive directors - Gardner, Gill and the finance director, Nick Humby - one non-executive director, Maurice Watkins, and two independent non-executive directors, Ian Much and Philip Yea. Three Cubic directors would give the Irish tycoons significant clout on everything from transfers to the appointment and sacking of managers. Two directors, a more realistic target, would have not much less sway and powerful veto rights.
The outlook for Ferguson can only be guessed at. While he and Magnier remain embroiled in their bitter dispute over the stud rights to the racehorse Rock Of Gibraltar, his long-term position will remain less than certain. There have been suggestions that Magnier and McManus want to install Martin O'Neill as his successor at some stage.
One possible silver lining for the United manager might emerge from a private meeting on Tuesday between him and Celtic's owner, Dermot Desmond, who is an ally of Magnier as well as a United shareholder. Peace talks between Ferguson and Magnier have been mooted for weeks and Desmond's involvement suggests a willingness to talk, if not tangible progress.
Judging by the softening of Cubic's stance towards United in recent days, it seems Magnier's short-term strategy now is to work peacefully towards power while knowing he and McManus are in a position of considerable strength. They were not entirely satisfied with the response they received to the 99 "corporate governance questions" they posed of Gardner last month. However, the tone of the document suggested that United appreciate they need to cede ground.
And unless they do cede ground - which will include granting seats on the board - Cubic still hold the option of either launching a full-blown takeover or effectively handing the chance of a takeover to another shareholder. Malcolm Glazer, the US sports magnate, would be an obvious person to approach to buy their shares. He already owns 14.3 per cent of the club but is unlikely to be a popular prospective owner with the fans. They do not want any one individual to own their club, for a start. Of more concern is Glazer's association with Rupert Murdoch. The pair almost did a deal that saw Glazer buy Murdoch's LA Dodgers and have not ruled out working together in the future.
Short of a full takeover by Cubic or the selling of their stock to a predator, United are acutely aware of the need to edge closer to the Irishmen's views of how the club is run. If they do not, they still risk having to face an Emergency General Meeting or being reported to the Financial Services Authority.
What recent events have proved beyond all doubt is that the share-buying episode, though related, is not purely down to Ferguson's legal dispute with Magnier over Rock Of Gibraltar.
The plc row has developed quicker and become far more wide-ranging than most observers thought was possible and the Irish duo remain steadfast in their desire to bring the club in line with what they deem to be good business practice.
They have not won too many friends among the United support for the manner in which they expressed their opinions in a letter to Gardner, which was subsequently leaked to the press. Magnier in particular - because of his battle with Ferguson - has been the victim of widespread abuse. However, over the past fortnight, they have been heartened that even outspoken organisations such as Shareholders United have raised concerns about corporate governance issues at Old Trafford.
They will probably also have welcomed the announcement by the Premier League chief executive, Richard Scudamore, that clubs will have to declare exactly how much they pay in transfer fees and payments to agents from next season.
And so the saga will continue to unfold. Cubic will maintain that their motives are driven purely by a desire to protect their investment. United will ignore them at their peril. And the fans will shout from the margins.
THE VIEW FROM OLD TRAFFORD
"We don't have and don't want a sugar daddy"
David Gill, United's chief executive, in November
"The fact that he [John Magnier] is a major shareholder doesn't affect me anyway. You have to do what you think is right."
Sir Alex Ferguson explains why he has issued legal proceedings against Magnier over stud-rights to Rock of Gibraltar
"Although the media have reported various allegations, Manchester United has received no documentary evidence from any party to support these allegations."
Manchester United make statement to the Stock Exchange last month after announcing an internal review of transfers after pressure from Magnier and McManusReuse content