Japanese bank lends hope to United fans fighting takeover

Japan's largest investment bank, Nomura, confirmed yesterday that it was in talks about financing a fan-centred initiative to prevent the takeover of Manchester United by Malcolm Glazer.

Japan's largest investment bank, Nomura, confirmed yesterday that it was in talks about financing a fan-centred initiative to prevent the takeover of Manchester United by Malcolm Glazer.

The architect of the plan is Keith Harris, the former chairman of the Football League, now the chairman of the corporate brokers, Seymour Pierce. Harris has been working on a financing package with Nomura for several weeks, although details have not been made public.

Nomura said in a statement yesterday: "Nomura confirms its Asset Finance Group is in discussions with Seymour Pierce Ltd about providing finance to assist them and the supporters with a view to developing a strategy that will provide a long-term future for Manchester United that is in the best interests of the club."

Any large-scale, supporter-based share acquisition to thwart Glazer raises questions, not least how a fans' consortium would repay a loan of up to £200m from Nomura. But the mere confirmation by the bank that talks are ongoing signals the start of the endgame in the current battle for ownership of United.

Glazer wants total control, at some stage. He owns 28.11 per cent of the club, not far behind the stake owned by the Irish racing tycoons, John Magnier and JP McManus, who own 28.9 per cent via their Cubic Expression company.

Yet it is understood that Glazer needs guarantees that he has access to more than 75 per cent of United before he can obtain the funding to buy it all. With more than 75 per cent of the stock accessible, he could borrow against United's future earnings to fund his bid. Any such borrowing needs approval by the owners of 75 per cent of the shares. Glazer would approve his own loan. It would be a self-fulfilling deal.

But short of 75 per cent, Glazer cannot borrow against the club's future earnings, and runs the risk of overspending, using borrowed money, to fall short of ownership of the club. Glazer has used family cash to pay for almost £70m of shares purchased in the last eight days, but he would have to borrow to afford a full takeover. Therefore he needs to persuade Cubic and others to sell, or else risk being frustrated by a Nomura-funded blocking group owning 25 per cent or more.

According to reports, Nomura initially earmarked £200m of funding for Harris's scheme, enough to buy more than a quarter of the club's shares at current prices. Any loan would have been partly repaid with funds released from a securitisation, or in other words, a loan guaranteed against future ticket sales or revenue from media rights. That original plan will no longer work. When it was first conceived, Glazer did not own a 25 per cent blocking stake to prevent it. Now he does. But as yesterday's statement confirms, Nomura and Harris are still in talks. "The proposal is about devising something which stops any one individual taking over United," one source said. "That's the point. This is not a takeover bid."

The obvious next move for Harris and fans' groups is to identify 25 per cent of shareholders who are anti-Glazer and pool their holdings in a formal, single block. This would be time-consuming and logistically tough. With Glazer owning 28.11 per cent, Cubic and their perceived allies around 35 per cent combined, and small institutions around 20 per cent, that leaves only around 17 per cent of confirmed fans or "floaters". Which is where Nomura's money comes in.

That could be used to buy stock either from the institutions or the "floaters" or possibly even from Cubic. But there would remain a stumbling block over repaying the money to Nomura. No details have been made public, although it is possible that Nomura might need to lend much less, and tens of thousands of fans, collectively, would fund the venture.

In other news this weekend, Manchester United will be playing a football match.