Mark Kleinman: Glazers could see biggest ever football club sale
It was Sir Alex Ferguson who coined the phrase “squeaky bum time” in reference to those anxious moments at the end of seasons when Champions League and Premier League titles and FA Cups hung in the balance.
Fergie’s employers for the last eight years of his reign, the Glazer family, are about to undergo their own version of that classic phrase. My exclusive revelation on Tuesday that Manchester United’s board was preparing to announce a decision to explore “strategic alternatives” – followed hours later by confirmation to the New York Stock Exchange – paves the way for the richest football club sale in history.
The launch of a formal process means that during the course of 2022, half of the English members of the ill-fated European Super League (ESL) will have initiated auctions. Chelsea’s was, of course, triggered by the imposition of sanctions on former owner Roman Abramovich, but it is no coincidence that Fenway Sports Group, Liverpool’s owner, and the Glazers have decided that now is the time to cash in on the two most successful clubs in English football history.
The ESL’s failure is one of the reasons for that – FSG and the Glazers were determined to build a new powerhouse in the sport that would guarantee virtually perpetual income for the sport’s most powerful teams.
The backlash against that idea, and the arrival of a weakening global economy, may mean that the high watermark for football club valuations is imminent, or might already have passed.
Chelsea’s sale for £2.5bn represented a stellar price in what was effectively a firesale. It’s hardly surprising, therefore, that Manchester United’s board has turned to Joe Ravitch and Colin Neville of The Raine Group to lead its strategic review.
Ravitch was quoted in one newspaper this week as saying that “United is not just a football club when it has such a huge global fanbase.”
That supporter base, estimated at 1.1bn in United’s announcement this week, underlines the fact that it sees itself as a global media company. Indeed, Twitter’s $44bn valuation in its recent takeover by Elon Musk, would imply that United could trade for even more than some of the figures bandied about in recent months. Squeaky bum time indeed.
Few listed company sectors have been more bombed-out by Britain’s economic crisis than its housebuilders. Barratt Developments, Persimmon and Taylor Wimpey have all seen their shares slump by between one-third and just over half in the last 12 months.
Kwasi Kwarteng’s short-lived and disastrous mini-Budget was among the catalysts: accelerating interest rate rises, pushing up borrowing costs for property buyers, are creating the gloomiest prospects for the industry for years.
A recent research note from HSBC forecasting that average house prices outside London would fall by 7.5% from the autumn – with the figure in the centre of the capital running at twice that level – looks moderate, based on the mood of many industry executives.
The answer, according to some, is likely to be more sector consolidation among both listed and private housebuilders.
One target is the housebuilding arm of property developer St Modwen, which Blackstone took private last year in a £1.3bn deal. Among the suitors is rumoured to be Avant Homes Group, which is owned by Berkeley DeVeer and the investment giant Elliott Advisors. There are, apparently, no formal talks, but given that Jeff Fairburn, the former Persimmon chief whose gargantuan pay package sparked a furore before his departure in ?, chairs Avant, the speculation is unsurprising.
Fairburn is said to be keen on a second act at building a major housebuilding industry player – so even if St Modwen’s operation doesn’t get swallowed up by Avant, it will have other bids shovel-ready before too long.
More on the travails of Bink, the fintech company struggling to secure new funding amid the deteriorating environment for backing early-stage companies. Two weeks ago here, I reported that Loyalty Angels, Bink’s holding company, was scrambling to raise the cash it needs to continue operating until February 2023.
Bink boasts Barclays and Lloyds Banking Group among its investors, but both seem to have ruled themselves out of stumping up any more capital – not a great sign for Bob Wigley, the start-up’s chairman who also happens to chair UK Finance, the banking industry lobbying group which counts Barclays and Lloyds as two of its leading members.
Since then, Bink’s urgency seems to have intensified. I’m told a deadline of this Wednesday was set for existing investors to participate in the emergency funding round, which is expected to be in the order of £6.5m.
“It is of critical importance that a significant number of existing investors take the opportunity to invest at this discounted price. If this proves not to be the case it could lead to the failure of this funding round and the business”, said an investor memo circulated last week.
Bink has also signalled plans to cut its cost base by 20% – a decision it acknowledges will affect the pace of its rollout – and announce changes to its board. Whether those involve its illustrious chairman remains to be seen.