Thread by @SwedishRumble

(1/22) In this 🧵we cover why it perhaps is premature to rule out Elon Musk buying #MUFC, and especially look at a couple of aspects that have yet to be covered, that greatly increase the odds of this takeover taking place.

(2/22) The report of Musk’s interest to by MUFC has not really been taken seriously. Reactions has varied from total disbelief to at best speculations on how nothing can be ruled out when it comes to Elon Musk. There are however many scenarios – other than it...

(3/22)..being an ‘act of madness’ – that could explain his interest in the club. In this thread, we will look closer at three of them. First of all, it is important to remember that Elon Must has a long history of cooperating with Saudi Arabia.

(4/22) Lately, it has been widely covered how the Saudis’ helped funding and participated in Musk’s takeover of Twitter, which has raised concerns about “potential influence” by the Kingdom of Saudi Arabia on Twitter’s operations. axios.com/2022/11/01/elo…

(5/22) But this cooperation goes further back in time. In 2018, Musk and the Saudis had well developed plans to take the entire Tesla company private, which lead to Musk’s famous “Funding secured” tweet.
theguardian.com/technology/202…

(6/22) So Elon Musk, the PIF and Saudi Arabia are close, so what? Any deal involving the Saudi’s has a big transaction risk due to the #Khashoggi slaying. What does that mean? If the Glazers accept an offer from the Saudis…

(7/22)..there is a risk that the transaction does not go through, due to for example widespread fan protests. That would be a disaster. Hence, I think any reasonable adviser would advise – against – accepting a Saudi bid, if any other bid at least is in the same vicinity.

(8/22) The Saudis see a lot of high profile assets – which are sought after by sovereign wealth funds with a long investment horizon – being snatched up by their neighbors. Any business done by Musk, involves the Saudis. If Musk buys MUFC, and the Saudis take a 10-20% stake, …

(9/22)…they have a so called strategic corner meaning that nobody can buy the club – after Musk -- without being accepted by the Saudis. In practice, they get an option to buy MUFC after Musk.

(10/22) In short, I cannot see the Saudis winning an auction for MUFC, but by financing Musk’s acquisition of the club as well as taking on a minority share – the opportunity to take a long-term position in MUFC is not lost.

(11/22) The second reason: “Buying” MUFC is in all likelihood – much much cheaper – for Elon Musk than for Qatar. Why? The Glazers owns 67% of the shares in MUFC. 33% is floated on the NYSE. If Qatar is to buy the club, invest a lot of money in developing…

(12/22)…not only OT but the land around it, I cannot see how they would not go for buying all shares of the club (technically through a merger). It is however perfectly possible to gain full control of the club, by just buying the Glazers’ 67% stake through…

(13/22)…an over-the-counter (OTC) transaction with the siblings. No obligation to make a mandatory offer to the remaining minority owners exists in the MUFC plc’s jurisdiction (the Cayman Islands).

(14/22) If someone pays 6bn for all shares of MUFC in a merger, the Glazers get £4.02bn. Hence, from the Glazers’ point of view, an offer of £4.03bn for their shares in an OTC transaction is more lucrative. Musk would surely not shy away from leaving 33% of MUFC’s…

(15/22)…shares on NYSE. So what does this mean? If the Qataris are offering to buy all shares of MUFC for 5bn, Musk could match that offer – from the siblings’ POV – by offering £3.35bn for their shares only. If the Saudis’ take 20% and say a specialist sports fund take 15%...

(16/22)…Musk must “only” ante up £2.177bn.

(17/22) Thirdly, this is not my area of expertise, but it is very easy for a sport owner – doing it right – to be popular. Musk’s public image is definitely at an all-time low right now. While Musk is a lot of things, he is not dumb.

(18/22) The SEC has forced him to step away from Tesla. He has communicated with “twitter” using twitter language. But he is not the man to lead Twitter as a company, and will soon step down from the CEO position.

(19/22) Tesla’s honeymoon is over, with all other car brands starting to market competing EV products. Musk will not have a hard time getting the hours to pass, but between sparse SpaceX project news, he will have a hard time getting good press going forward.

(20/22) Like the Evening Standard speculate on in the below piece, its not like it would not be “positive” for Musk to own MUFC. We have the biggest fan base in the world. He benefits from good press and marketing. 2+2=Matic standard.co.uk/tech/why-elon-…

(21/22) So do I think Elon Musk will buy MUFC? No, when creating a short list of who I thought were the most likely to buy the club back on December 1, I put Qatar at No 1. Simply because it made the most sense for them, they get the biggest synergies. Qatar is still my No 1.

(22/22) But my first reaction to Musk's reported interest was that it was a ploy. However, for the reasons pointed out above, I would -- not -- rule it out. The Saudis could be pushing, the price isn't as high, and there are of course advantages for Musk with owning the club.

BTW, my twitter following isn't the biggest, if you like this thread, smash a like and retweet it! Many more threads to follow in the near future.