Organizational Study
case 6
Manchester United: The Glazer Takeover
On June 14, 2005, US businessman Malcolm Glazer announced he had acquired over 90% of the shares of Manchester United plc. This would allow him to delist Manchester United’s shares from the London Stock Exchange and turn it into a private company. Glazer’s offer of £3 per share was over 40 times the previous year’s net income and was almost double the average market price of Man United’s shares during the preceding three years. All told, the buyout cost was £812 million – mainly financed by borrowings of £540 million. For the first time in its history, the club would go into debt. The takeover generated outrage among Man United’s most loyal fans. The Financial Times reported: The level of anger among Manchester United fans was palpable as they gathered last night outside the Theatre of Dreams, the name the club gives to its Old Trafford ground. A big “Not For Sale” sign was quickly erected on the club’s gates. Rob Adams, a lifelong fan, said: “It is the worst thing that could have happened . . . He [Mr. Glazer] is a businessman and all he wants to do is scoop as much money out of the club as possible.” Another said: “He’s just not interested in the game of football.” Margaret Orhan, company secretary of Shareholders United, which has been leading the fight against the Glazer bid, said: “We are opposed to any single person owning the club. It is 126 years old and belongs to the community it serves. We are opposed to anyone who is going to take away the fans’ voices. You are talking £800m – none of which is his money. Who is going to have to pay it back? The profit that this club produces is not going to even pay the interest on what he is going to borrow. It is our money; we are the ones that put bums on seats; we buy the shirts and all the rest.”
This case was written by Robert M. Grant and Simon I. Peck, assisted by Aude Le Minor and Drew Hoffman
Copyright © 2008 Robert M. Grant and
Manchester United: The Glazer Takeover
On June 14, 2005, US businessman Malcolm Glazer announced he had acquired over 90% of the shares of Manchester United plc. This would allow him to delist Manchester United’s shares from the London Stock Exchange and turn it into a private company. Glazer’s offer of £3 per share was over 40 times the previous year’s net income and was almost double the average market price of Man United’s shares during the preceding three years. All told, the buyout cost was £812 million – mainly financed by borrowings of £540 million. For the first time in its history, the club would go into debt. The takeover generated outrage among Man United’s most loyal fans. The Financial Times reported: The level of anger among Manchester United fans was palpable as they gathered last night outside the Theatre of Dreams, the name the club gives to its Old Trafford ground. A big “Not For Sale” sign was quickly erected on the club’s gates. Rob Adams, a lifelong fan, said: “It is the worst thing that could have happened . . . He [Mr. Glazer] is a businessman and all he wants to do is scoop as much money out of the club as possible.” Another said: “He’s just not interested in the game of football.” Margaret Orhan, company secretary of Shareholders United, which has been leading the fight against the Glazer bid, said: “We are opposed to any single person owning the club. It is 126 years old and belongs to the community it serves. We are opposed to anyone who is going to take away the fans’ voices. You are talking £800m – none of which is his money. Who is going to have to pay it back? The profit that this club produces is not going to even pay the interest on what he is going to borrow. It is our money; we are the ones that put bums on seats; we buy the shirts and all the rest.”
This case was written by Robert M. Grant and Simon I. Peck, assisted by Aude Le Minor and Drew Hoffman
Copyright © 2008 Robert M. Grant and