Sir Jim Ratcliffe warned Manchester United he was prepared to withdraw his offer to become minority owner if it was not given the green light before Christmas, it has been revealed.
It was announced on December 24th that the Ineos chairman had agreed to buy a 25 per cent stake in the Premier League club in a deal that included investing $300 million (€275 million) into their infrastructure.
But US Securities and Exchange Commission (SEC) filings released on Wednesday have revealed Ratcliffe’s patience had begun to wear thin shortly before an agreement was struck.
In the week before Christmas, Ratcliffe’s company Trawlers Limited “gave Manchester United a deadline of December 25th, 2023 to accept its best and final proposal”.
Manchester United reaches agreement for Sir Jim Ratcliffe, Chairman of INEOS, to acquire up to a 25% shareholding in the Company.#MUFC
Advertisement— Manchester United (@ManUtd) December 24, 2023
Widespread discussions had been held between February’s initial offer for a controlling stake and the ultimate outcome.
There was pushback from non-affiliated directors to what is known in the filings as the ‘October Proposal’ of $33 for 25 per cent of Class A and B shares plus $300 million capital.
Ratcliffe agreed to slight concessions after conversations between December 18th and 22nd but “was not prepared to accept any of other changes proposed by the non-affiliated directors”.
It led to an informal meeting of the board of directors on December 22nd and a “robust discussion regarding the feedback from the offeror”.
The board representatives noted Ratcliffe “could decide to withdraw (the) proposal if the board of directors was not prepared to move forward by December 25, 2023”.
That transaction was subsequently agreed on December 24th, bringing an end to a process that started in early June 2022.
United met representatives of investment bank Raine “on several occasions to discuss potential strategic opportunities to enhance shareholder value and serve the best interests of the football club’s fans”.
That led to the eventual November 22nd, 2022 announcement of a ‘Strategic Alternatives Review Process’, leading to appointed financial adviser Raine speaking to over 170 interested parties.
SEC filings revealed Raine is to be paid an estimated $31.5 million for their services.
United entered into 26 nondisclosure agreements and 19 were invited to the first round of bidding, including Ratcliffe and Sheikh Jassim.
The Qatari was considered the biggest competition to buy the club and formally withdrew from the process on October 15th, 2023.
Known as ‘Bidder A’ in the filings, it was noted on a number of occasions that they “did not provide customary financing commitment letters”.
Raine informed Sheikh Jassim’s bid on May 22nd that a proposal to acquire all ordinary shares would only be considered if a price of $35.25 was met.
In the end, Ratcliffe struck a deal to buy 25 per cent of Class B shares held by the Glazer family and up to 25 per cent of all Class A shares at a price of $33.
That offer for up to 13,237,834 Class A ordinary shares was confirmed on Wednesday.
United’s Class A share price was $19.84 on December 22nd – the last full day before the public announcement of Ratcliffe’s offer.
On the last full trading day before the commencement of the offer the price was $21.20 per share.
The SEC document read: “The offer and withdrawal rights will expire at one minute after 11.59pm eastern time on February 13, 2024, unless the offer is extended or earlier terminated.”
Sir Jim Ratcliffe today met with fan representatives and local community leaders 🤝#MUFC
— Manchester United (@ManUtd) January 15, 2024
The filing also said upon the consummation of the offer Ratcliffe’s shares would collectively “represent a 27.69 per cent ownership interest and 28.71 per cent voting interest”.
As part of the tender process, United also wrote to shareholders inviting them to attend an extraordinary general meeting in Rochester, New York on February 5th.
That letter is signed by Patrick Stewart, United’s interim chief executive officer and general counsel, and Cliff Baty, the club’s chief financial officer.
The SEC filings revealed that the pair are in line for a bonus “equal to two times the annual salary of such executive officer as of the date of the closing”.
