Red Knights' dream is destined to fail over Glazers' valuation of United

Club's claim to have received separate offer of £1.5bn suggests fans' group will fall way short of asking price
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The Independent Football

The Glazer family are destined to be the owners of Manchester United for the foreseeable future, with a deepening sense taking hold last night that the Red Knights' bid to take over the club is doomed to fail.

The complex process of signing up high net worth Knights to contracts, legally binding them into a takeover offer, is ongoing and some kind of bid will be tabled, but even the staunchest supporters of the movement are resigned to the fact that their offer will not be large enough to dislodge the Americans. The Red Knights will not offer more than £1bn and, given that the Glazers' PR offensive has elicited the suggestion that an as yet unnamed buyer offered £1.5bn but was turned down, it will simply not be enough.

The only remaining hope is that United fans will refuse to renew their season tickets, unnerving the Glazers into accepting an offer. To this end, the Manchester United Supporters Trust (Must) issued its own pleas for fans to delay renewal on Tuesday night. A bid might be tabled as early as 11 June to generate the publicity to boost the boycott. But it seems too late to damage United seriously: many fans have already renewed.

Speaking in the United States, where the club are promoting their pre-season tour, the United chief executive, David Gill, said: "There haven't been any boycotts. Every game at Manchester United has been sold out. Our season-ticket sales and renewals for the upcoming season are on track with previous years. Our executive ticket renewals are on track. We will have to see at the start of the season but we are envisaging sell-out crowds.

Gill added: "There will always be factions that are unhappy with it or want to change it but the reality of it is the Glazer family have owned the club for those five years, they own it 100 per cent. They've been good owners and they've pushed the club forward in many areas, as we've discussed, and that won't change.

"So the Red Knights – we understand protests, we understand the people's right to protest but if the owner of the house doesn't want to sell it, it's not for sale."

No precise date could be put on a Red Knight bid last night because of the ongoing fund-raising work. But a bid will be made, then rejected and it is expected that the Knights will subsequently declare they are not prepared to line the pockets of detested proprietors by making an unrealistic valuation. This will allow them to make a dignified withdrawal.

Though the green and gold campaign, which has run alongside the Red Knights' efforts, has been one of the most imaginative and powerful fan movements the game has seen, some City observers believe that the takeover efforts have lacked the same subtlety and have been misguided. The public furore attached to the innocuous first meeting of prospective Knights at Freshfields Solicitors in London on 2 March created the sense that a hostile bid was in the offing.

Some among the leaders of the Red Knights have always subscribed to a far subtler strategy. They argue that a grass-roots campaign encouraging non-renewal of season tickets, which would have cut off a vital revenue stream to the Glazers, should have been the first part of the effort to dislodge the Americans, who could then be approached and asked at what price they would be willing to sell. Instead, the build-up has been more attritional, based on the Red Knights' own perceived value of someone else's property.

The Knights acknowledge that raising a bid is "complicated" and there are certainly many hidden costs. For example, if the Knights do, as expected, offer to take over the Glazers' recent bond issue – as well as offering a cash consideration for the club and taking over Payment in Kind loans – then the bond holders would be each entitled to a 101p premium for their bonds from the Knights, payable in the event of a change of ownership. That means the Knights would need a hefty sum for possible premium pay-outs.

It emerged yesterday that a two per cent interest rate rise from August on the Payment in Kind loan that the Glazers took out to buy the club – which has already grown significantly from an initial £138m in 2006 – from 14.25 to 16.25 per cent will add £75m to the club's debt by the loans' scheduled expiry date in 2017. City analysts do not consider this to be hugely significant in the wider scheme of things. A far more graphic reason for the Glazers' unpopularity is laid bare in a detailed analysis by the Andersred blog, which reveals that the Glazers have cost United £437m since taking over the club, including £80m in professional fees and £216m in interest paid.

The Must chief executive, Duncan Drasdo, said this illustrated the need to support a season-ticket boycott. "This is why we want to see the Glazer ownership end before the start of next season," he said. "As supporters who love the club, we cannot stand by any longer letting them continue to do damage. Season-ticket holders are encouraged to delay renewing until the Red Knights' bid comes in."

Rise and fall of the Red Knights

20 January Accounts show that debts at the parent company of Manchester United had increased to £716.5m.

23 January The Manchester United Supporters Trust distribute yellow and green scarves, sporting the colours of United forebears Newton Heath, as a means of protest during the 4-0 home win over Hull. An initial order of 500 sells out, as does the next batch of 1,000. Over 30,000 have since been sold.

1 March The Red Knights, a group of United-supporting businessmen, meet in London to discuss a takeover bid.

2 March The group release a statement confirming that they are looking at "the feasibility of putting together a proposal to be put to the Glazer Family regarding the ownership of Manchester United."

4 March United chairman David Gill dismisses the Red Knights' plans and launches an attack on the group's leader Keith Harris, claiming his "track record in football isn't anything to write home about."

5 March Reports suggest members of the Red Knights have pledged up to £1.5bn to buy the business.

7 March Sir Alex Ferguson dismisses reports that he is supporting the Red Knights' proposal.

11 March The Red Knights appoint Japanese investment bank Nomura as advisers to their proposed bid.

14 April The group meet with Nomura in London to discuss their bid.

9 May United supporters set off smoke bombs outside Old Trafford in protest of the Glazer's ownership of the club.

10 May Jim O'Neill, one of the key members of the Red Knights, states that the group will not pay over the odds for the club and that they will "continue to build support in a measured way and will give a further update in due course."