Thread by @ole_was_right

(Thread)

As you’ve undoubtedly heard, INEOS have presented an offer to purchase a majority stake in #MUFC, with Joel and Avram Glazer (collectively, the “bastards”) maintaining 20% ownership. Let’s talk about what this means, & whether it’s time for fans (myself included) to

roll back their support of Britain’s richest man.

Per reports, the basic outline of the bid is as follows:
-SJR will purchase, at minimum 50.1% of the club
-the Bastards will maintain 20% of outstanding shares. But, their siblings will sell out.
-institutional investors will

maintain their current holdings. This leaves many questions for fans, but I’ll answer three of them in this thread:
-will the bastards still have influence over the club?
-what will happen to the debt?
-does the deal make sense for the bastards, their siblings, SJR/INEOS, and

the fans?

1) influence. As everyone knows, 5 of the Glazers currently sit on the board— that’s why we’ve been shit for a decade. If this bid goes through, odds are, they’ll lose those positions. A corporate board serves at the pleasure of the shareholders. So, INEOS would be

able to appoint whomever they like to the board, once they assume control. However, there can be a contractual relationship wherein a third party (ie the bastards) would be allowed to appoint a board member. This is fairly common. Likewise, majority shareholders will often times

take input from significant minority shareholders. However, there’s no legal obligation to do so. If the bastards did get a board seat, however, it would be relatively insignificant. Decisions such as issuing dividends, assuming new debt, etc. will ultimately rest with the board

as a whole (which will be controlled by INEOS). In short: the glazers are unlikely to influence the club’s decisions. That will rest with INEOS, and whomever they appoint.

2) debt? MUFC’s debt is always a contentious topic. It’s part of why so many of us are #GlazerOut. Each of

the relevant loan agreements have “balloon” clauses (also called “acceleration” clauses). Basically, if a particular event (ie insolvency, default, etc) occurs, the entirety of the loan becomes immediately due and payable. In MUFC’s case, one triggering event for these

acceleration clauses is “change of control.” Basically, if a new entity (INEOS) holds more than 50% of the company’s stock, it will trigger acceleration of the loan. Prior reports have indicated that SJR wants to clear the club of its existing liabilities. But, those reports were

based upon him buying the glazers out entirely. So, we don’t know for certain, if that is still the approach he wants. This leaves us with a few options for handling the debt: 1) the debt could be paid using the money he saves by leaving the bastards with 20% equity; 2) the debt

could be refinanced with the current debt holders; 3) the debt could be paid by INEOS via financing from a new creditor (hopeful under better terms). So, the options are plentiful. Frankly, we don’t know what is being contemplated at this point. I favor options 1 and 3 (provided

that the new debt is on INEOS’s books, rather than the club’s).

3) does the deal make sense?

-For the bastards and their siblings: it’s a great deal. The siblings get out; the bastards get to cash in on some stock; and the bastards get to hold onto some stock. Per reports, the

bastards are hesitant to sell because they feel the club could appreciate in value. This arrangement allows them to have their cake (stock) and eat it, too (selling some shares). So, they will be happy.

-for INEOS/SJR: it’s a satisfactory agreement. INEOS want control, and they

want the deal to go through. This arrangement is so appealing to the glazers, that it makes the bid almost undeniable. It hits everyone’s needs. It also saves money in the up-front transaction. Frankly, it’s brilliant, from a legal/financial perspective.

For the fans: setting

aside all other bids, it works, if you’re not petty. Pretend for a moment that we had this offer on the table 1 year ago. Any MUFC fan would’ve snapped your hand off for it. The glazeirs will have minimal (if any) input on the club; the club will be owned by England’s richest

man; & the debt will, likely, be on the books of another company, or gone. For fans who are against the Glazers & Qatari ownership, this is as good as it gets. For fans who want Qatar, this won’t change their mind. To those on the fence: I wouldn’t let this sway you either way.