Manchester United PLC
Update on Glazer proposal
As previously announced the Board of Manchester United has received a revised
proposal from the Glazer family ('Glazer') which owns 28.8% of the Company.
Any Board has a responsibility to consider a bona fide offer proposal. As it
stated on 15 October 2004, in considering a proposal, the Board will take into
account all relevant considerations including the potential financial terms,
possible financial structure and any impact these considerations may have on
the
future operation of the football club.
Subject to the satisfaction of certain pre-conditions, Glazer is willing to
make
an offer of 300p per share in cash with a minimum 75% acceptance level. The
pre-conditions, which could be subject to change currently include due
diligence
and a public recommendation of the offer by the Board.
The financial structure of this revised proposal of 300p has been restructured
since the proposal considered by the Board in October. The proposal involves a
lower level of senior debt than the previous proposal with the equity in the
bidding vehicle being supplied by Glazer and an issuance of preferred
securities. These preferred securities would be issued by a holding company
above the bidding vehicle, such securities only being secured upon the shares
in
that holding company.
The Board believes that the nature and return requirements of this capital
structure will put pressure on the business of Manchester United, particularly
if Glazer's business plan was not met. The Board continues to believe that
Glazer's business plan assumptions are aggressive and that the direct and
indirect financial strain on the business could be damaging.
Glazer's financing is supported by commitment letters and the proposed offer is
at a level which if made, the Board is likely to regard as fair. The Board
believes that the proposal may be deliverable and that a majority of
shareholders would want the Board to permit its development. Against that
background, the Board has concluded that it now must provide limited due
diligence, following which Glazer will be able to determine whether it wishes
to
put an offer to shareholders.
If the current proposal were to develop into an offer - and there can be no
certainty that this will occur - the Board considers that it is unlikely to be
able to recommend the offer as being in the best interests of Manchester
United,
notwithstanding the fairness of the price. However, it is ultimately for the
shareholders to determine whether an offer will succeed.
In determining its advice to shareholders in the event of an offer, the Board
will have to consider the offer in light of the Glazer's business plan and its
intentions in respect of the future development of the club. The Board would
expect to receive further clarification on both these factors from Glazer
following due diligence. The Board would seek assurances and protections in
these areas if an offer were to proceed.
The Board believes that its strategy and business plan for Manchester United
are
strong and that over time significant value can continue to be delivered to
shareholders.
Note:
Shareholders should note that this announcement has not been made with the
approval of Glazer and accordingly there can be no certainty that if an offer
is
made it will be in accordance with the terms set out above.
[Non-text portions of this message have been removed]
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