CASE STUDY


In May 2005 Malcolm Glazer, the US sports tycoon, fi nally took control of Manchester United, one of the UK’s leading football clubs. He paid 300p per share, which was considered by fi nancial analysts to be a very generous offer. Glazer had fi rst taken a stake in the company about two years earlier, and the battle for control had been fi erce. An interesting feature of this takeover battle was the disparate nature of the shareholders, and their different requirements from the company. The fans, holding less than 20%, fought desperately to prevent the takeover at any price, fearing that it would diminish the club as a footballing force. On the other hand, 3% was owned by Legal and General, a fi nancial institution which, one assumes, was aiming to make the most fi nancial return from its investment. And 6% was owned by Harry Dobson, not a United supporter, but an investor who had bought his stake in 2002 when the share price dipped to 127p. The requirements of these shareholders differed again from those of John Magnier and JP McManus, two Irish millionaires who had been long-term holders of about 29% of the shares, but had recently fallen out with the manager of the club, Alex Ferguson, over an unrelated matter. As the board of the company, charged with doing the best for the shareholders, how could you resolve this? The Glazer bid was mostly fi nanced by debt, which fans feared would reduce the club’s ability to buy players – is this in the best interests of the business? On the other hand, does that matter if the bid is in the best interests of (many of) the shareholders?

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