Billionaire Jim Ratcliffe Secures Minority Stake In Manchester United, Boosting Club's Valuation To $6.3B

British billionaire Jim Ratcliffe has bought a minority stake in the esteemed football club Manchester United MANU. The deal puts the club’s value at an estimated $6.3 billion, including debt. This agreement concludes a year-long sales process.

What Happened: A report from The Wall Street Journal says that Ratcliffe will hold 25% of Manchester United’s non-voting shares, which are listed on the New York Stock Exchange and were last traded near $20.

The billionaire will purchase these shares at $33 each, as announced by the club. Moreover, Ratcliffe will also gain 25% of the nonlisted voting shares owned by the Glazer family, thus becoming the single largest shareholder.

Founder and chairman of the Ineos petrochemical company, Ratcliffe will now oversee the club’s operations and talent recruitment. He will also invest an additional $300 million to refurbish Manchester United’s Old Trafford stadium. However, the commercial side of the business will remain under the Glazer family’s administration.

The agreement, currently subject to approval from the English Premier League, might initially disappoint Manchester United’s public shareholders and devoted fan base until Ratcliffe can prove his minority ownership can enhance the stock price and boost the team’s fading fortunes.

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The Glazer family initiated the sale of the club in November 2022 after a controversial tenure of almost 20 years, sparking frequent protests for their removal. Despite early conjecture about a complete sale, Ratcliffe’s offer to buy a minority stake became the favored bid by the Glazers in October, enabling the family to remain the controlling shareholders.

While the Glazers retain control over Manchester United, Ratcliffe’s investment positions him favorably should the family decide to sell fully. However, the new agreement does not contain any provisions for such a transition, according to insiders.

Why It Matters: Ratcliffe’s potential acquisition of a 25% stake in the club led to a surge in Manchester United’s shares.

The price of roughly $33 per share is a 65% premium over the club’s recent closing price on the NYSE. The football club was then valued at around $3.04 billion, according to Sky News.

This recent deal with Ratcliffe, therefore, indicates a significant increase in the club’s valuation and illustrates the billionaire’s potential influence on Manchester United’s future trajectory.

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Manchester United. Image Via Shutterstock