Manchester United's Valuation Soars: A Lucrative Payday For Shareholders

We are reading reports in Qatari media that Manchester United MANU has been acquired by our preferred bidder, Sheikh Jassim. The reports are being printed in Qatari state media, which Jassim’s father owns a stake in. British media has started cautiously reporting on the news, too; as we write more news flow is coming through - it is a developing situation.  

We think it’s likely the reports are accurate and if so it suggests a +$31 per share acquisition price or a ~47% IRR on our MANU position in the US model portfolio. It’s been quite a journey with Manchester United – at first it looked like Jim Ratcliffe might prevail; when Qatar stepped into the fray the process became a kind of game of “who has the most money” – the best situation for an investor looking at arbitrage can be in– Manchester United is unlike so many assets because it’s a trophy asset. 

The other thing – which must be said – is that a Qatari offer in excess of $6B is generous any which way you cut it. MANU stock is currently valued in the upper end of listed sports teams.

At a $6-7B valuation the company starts to be valued at 7x-8x sales, which puts it up with Liberty Formula One (the parent company of the Formula One franchise). We don’t think this is unreasonable for a “trophy” asset, though we do think this represents a very good pay day for shareholders — including the Glazers. Retain price target $29.00. 

Disclosure: The BlackBull Research AU Model portfolio holds financial positions in Manchester United PLC (MANU) as of the time of this article's publication. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions. The information provided in this article is for informational purposes only and does not constitute financial advice