BackManchester United: 3 US investment groups get involved in takeover bidding war
Ares Management has offered financing in the form of structured stock to at least one bidder.
PremiumThe takeover of Manchester United has been supported by financial support provided by American investment group Ares Management, three people with knowledge of the situation spoke to Reuters. Ares, which manages assets worth about $350 billion, is the latest US asset manager to try to secure a financial stake in the English football team. hedge firm Elliott Investment Management is also considering funding a bid after ruling out a full takeover of the team. According to reports, Oaktree Capital also provided finance to bidders.
The announcement comes as reports of Sheikh Jassim Bin Hamad Al Thani being one of the potential buyers have surfaced. The Qatari sheikh intends to provide a debt-free agreement, with support from the Nine Two Foundation. According to reports, Saudi Arabia has also joined the ManU bidding battle. Brokers acting on behalf of several Saudi organisations have signed the necessary paperwork, but it is unclear whether Saudi Arabia will actually make an offer.
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Ares, according to one of the sources, offered financing in the form of structured stock to at least one bidder. However, the bidder declined the funding because the terms were unappealing. Structured equity is a type of investment with recurring payments that often falls between equity and debt in a company's capital stack.
The fund manager has also made investments in Inter Miami CF and Spain's Atletico de Madrid football club. It is not immediately clear as to whether Ares was aiming to finance bids for Manchester United through that entity or another one, Reuters reported.
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In 2020, it was reported that Ares was supporting Miami-based soccer investor Kapital Football Group's efforts to acquire an English Premier League club. A year later, it was claimed that Kapital had given up trying to buy Southampton.
Prior to Chelsea's 4.25 billion pound ($5.1 billion) sale to a group led by Todd Boehly, Ares - one of the biggest private loan providers - was also said to have funded two of the unsuccessful offers for the club.Recently, it raised $3.7 billion for a specialised sports fund with the goal of funding teams and leagues.
The Glazers paid $951 million to acquire United in 2005 through a highly-leveraged transaction for 790 million pounds. The club forecasted up to 610 million pounds ($734 million) in revenues and up to 140 million pounds ($168 million) in adjusted profits before interest, tax, depreciation, and amortisation (EBITDA) for its fiscal year 2023.
(With Reuters inputs)
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