Cash bonanza for United's shareholders

THE MANCHESTER United chief executive, Martin Edwards, is likely to net more than pounds 80m from the sale of his 14 per cent stake in the club to Rupert Murdoch's BSkyB, while about 13,000 small shareholders, mostly fans, could share in a pounds 126m windfall.

City analysts expect Mr Edwards, the man who steered Manchester United to a pounds 47m stock market flotation in July 1991, to sell his stake and leave the club if BSkyB assumes control. The Manchester United chief executive, who just 10 years ago failed to sell the club for pounds 20m, has said repeatedly that he would consider selling the club if the right offer came along.

More uncertain is the fate of about 22 per cent of the company, which is in the hands of a number of small shareholders. City analysts were yesterday predicting that at least some of them will sell to BSkyB, taking advantage of a very lucrative offer.

BSkyB is expected to offer up to 225p for every Man Utd share, valuing the club at pounds 575m, a premium of more than 38 per cent on Friday's closing price of 159p. The club has had a fantastic run since joining the stock market at around 17.5p per share.

However, financial experts said that the price looked high for a company that last year had a turnover of just pounds 87.9m and profits of pounds 27.5m. However, they added that the potential to develop the United brand and merchandise was immense.

They pointed out that merchandising income, which accounts for just over 30 per cent of sales, is forecast to rise at breakneck pace in the coming years.

Others pointed out that buying the biggest club in Britain will give Mr Murdoch an edge in negotiations over football broadcasting rights. "It's a pre-emptive move by Mr Murdoch. It will give him immense leverage when it comes to renegotiating the TV rights for Premiership football."

However, the analyst warned that the ownership of one team could alienate other clubs.

"So far, media companies have refrained from buying football clubs because people thought that if you did a deal with one club you would upset all the others."

Some experts said that the takeover could provide a boost to football shares when the market opens today.

Most clubs have had a rough ride since joining the stock market as investors took fright at the wild swings in clubs' fortunes.

Newcastle shares were valued at 135p when the club floated and they now languish at 62p. Tottenham, which led the sport to the stock market in 1990, has slid from 138p per share to just 60p last week.