Thread by @ole_was_right

So, about last night...
(MEGA THREAD regarding the MUFC takeover)

The SEC disclosures have been made, and the club can finally begin to heal. Yesterday, MUFC posted its SEC disclosures pertaining to the deal with SJR/Tralwers (I will be using these parties interchangeably) and the Glazers (who will,

from time-to-time throughout this thread, be referred to as "the Bastards").

These disclosures were made using the K-6 form, which included the following exhibits:
-Amended Articles of Association ("Articles")
-The Stock Purchase Agreement between SJR and the bastards

-SJR's personal guarantee
-the Voting Agreement of the club

Let's start with the headlines, and then move to the legal minutia, and a bit of reading between the lines.

The biggest headline of them all, is the transaction itself. In short, the transaction will take place in 4 stages:

First, the initial transaction, which is between Trawlers and the bastards. Pursuant to this transaction, SJR will purchase 25% of class B shares from the bastards, in equal measure, at a rate of $33/share. This means that each bastard shall sell 4,591,366 shares, for a total of 27,551,898 shares.

Secondly, SJR will present a tender offer for 25% of outstanding class A shares (more on this later). These shares will be purchased at the same rate of $33/share, resulting in the purchase of 13,237,834 shares.

Thirdly, immediately at closing of the Tender Offer and the Initial purchase (this will include all conditions precedent to closing, such as PL approval and SEC compliance), SJR will inject $200M of capital contributions into the club. In exchange, he will subscribe for 1,966,900 Class A; and 4,093,707 Class B shares. A "subscription" is basically an agreement to purchase new shares directly from the company. This is significant for two reasons: 1) the subscription is an allowable form of capital contribution under PL/UEFA rules. Ordinarily, a club is only allowed to take 5M in reportable losses/season (this is, losses arising out of transfers, wages, etc) for the 3 year reporting period, for a total of 15M in losses. However, a club may take up to 35M in losses/yr, if 30M/yr of these losses are covered by an owner's capital injection. Unsurprisingly, the glazers have never done this. As such, on literally the first day of SJR's ownership, we will be able to maximize our FFP potential. 2) the subscription model is also significant because it dilutes present shareholders-- meaning that SJR gains voting power, and the Glazers lose it (more on that in the following tweet).

Lastly, by or before Dec 31, 2024, SJR will inject an additional $100M, in order to subscribe for 983,449 Class A Shares; and 2,046,853 Class B. The end result of these two rounds of investment, and subsequent dilution of shares, is that SJR will have 29% of overall voting power in the club.

So, aside from shares (for which SJR is undoubtedly overpaying), what does Trawlers gain from this deal?
- SJR, upon closing, will be our single largest shareholder for both Class A and class B shares.
- Initially SJR will get 2 board seats; however, if he were to become the majority SH, this right shifts to the Glazers, and he will get the right to appoint a majority of the board.
-SJR has veto power over many facets of the club. Firstly, SJR has publicly stated that he does not beleive in dividends. As such, it should come as no surprise that he insisted upon (and got) veto power over the issuance thereof-- "another Glazer," my ass. Likewise, SJR, as reported, will obtain sporting control in the form of the "Transfer Plan" (defined in the agreement as "plan and objectives of the Company and/or its Subsidiaries regarding Players (including transfers, in and out, whether on a permanent or temporary (loan) basis, and any other changes to their existing terms and conditions of employment), as disclosed to Purchaser in writing prior to the date of this Agreement"). While the details of the plan are not enclosed (for obvious reasons), I think it is rational to presume that this will set out budgetary restraints; methodologies; and "best practices" for the club's business moving forward.
-non-solicitation: from now until closing, the Glazers cannot communicate with third parties regarding other offers to buy the club (in whole or in part). In essence, the deal is done, and there's little turning back (more on this later as well) .

Now, onto the fun stuff, where we get to see the intent of the parties. As a bit of background here, a transactional attorney's job, when drafting a contract like this, is to figure out what the parties need; how they will interact going forward; and how to satisfy those needs/interactions, whilst building in clauses for potential contingencies/pitfalls.

The first point of note, which stands out, is that neither party views this as a "marriage." This is to say that there are clear exit options (for the bastards) and clear routes to control for SJR. This tone is set at the beginning of the document, which defines Glazer Parties as one block, and Trawler Parties as an "adverse" block. From a drafting perspective, the parties are labeled in this way to settle necessary contingencies-- such as what happens if Trawlers eventually becomes a majority Shareholder; or if SJR wishes for INEOS to eventually fill the shoes of Trawlers.

For the last months-- much to my frustration-- much was made of class B conversion. It was an exercise in making a mountain out of a molehill. But, that has been well-and-truly put to bed here, in a few ways. Firstly, the amended articles of association make clear that the simplest transaction, for all involved, will be a buyout by and amongst *these* parties. First, SJR has a right of first offer, if someone comes in to buyout the Glazers. So, let's say Jassim comes in a year after closing, and offers $45/share, and the Glazers agree. Well, SJR can simply jump in, say "I'll take that deal" and walk away with control of the club. The flip side of this coin, however, is that if SJR refuses to take the deal, the Glazers can drag him-- kicking and screaming-- into the sale of his shares. So, why would he agree to this?

Well, the answer lays in a clause that I'm yet to see a single person discuss. Article IX of the amended articles is *highly* protective. This provision states "In the event any Person other than a Shareholder would acquire, directly or indirectly, more than fifty per cent. (50%) of the Voting Power of the Company (a “Voting Power Change”) and following such acquisition, one or more Shareholders would continue to have rights under this Agreement, such Person shall, prior to the effectiveness of such acquisition, enter into an agreement with the applicable Shareholder and the Company that provides for all such rights, protections and benefits to apply following such acquisition."

This is nothing short of a legal masterclass.

In essence, this forces any would-be purchaser to dive head-first, by purchasing 100% of the club. If they do not, and they simply purchase the Glazers' current shares, they're stuck with INEOS-- and all of the protections offered to them by this agreement. That is going to push away almost anyone with the capital necessary to purchase the club-- as the agreement is simply too protective of INEOS to be appealing.

But wait, there's more...

Let's say somebody does want to buy out the entire club, couldn't the glazer's still force SJR to sell? Short answer, yes. Long answer: it would be almost impossible to do so.

Remember how I said that the document broke the parties into blocks for ease of drafting, and the handling of contingencies? Well, that's where this gets fun. Pursuant to Section 7.1, the Glazers can *only* drag SJR into a sale, if they are the majority holder (50%+1 share). And, even then, there is an 18 month grace period during which they won't be able to activate the "drag along" clause. On day 1, SJR will have 25% voting power. Within the first year, SJR will own 29% of the club. Concurrent with that, he will have 18 months to convince the Glazers not named Avram and Joel (collectively referred to from hereon out as, the "super bastards") to sell him 21% of shares, which he can easily obtain by just buying out two of the non-super bastard Glazers.

The transaction inherently pre-supposes, via these clauses, that this deal only ends 2 ways: with SJR in control; or with a full sale at an enormous up-charge to the would-be purchaser.

Another important part of the "blocks" created in the agreement, is that we see how INEOS can be brought into the fold eventually. Class B shares will still convert automatically, unless certain conditions are met. One such condition, is if conveyance of B shares, is made to a "permitted party." The Glazer's most likely permitted parties are trusts, family members, and (hopefully, because fuck them) settlement for divorce 🤣 (yes, this is actually listed as a reason for non-conversion of shares). For SJR, the most important "permitted party" is any entity in which he has control, like... you guessed it, INEOS. This explains why they made an announcement as well, and why United included them in their announcement despite being an apparent non-party. Its also worth noting that Trawlers likely only exists as a tax-beneficial play for SJR during this little interim period before he seizes full control.

Honestly, that's most of the sexy stuff out of the way. There's a ton more that I might go in on later, or if someone asks a relevant question. But, for now, this was more than enough to give an overview, without repeating what the media and other sources have discussed.

@GJB77DBAD INEOS or any related party***