Billionaire Elon Musk made sports headlines in August 2022 with a tweet that he was buying English Premier League team Manchester United. Musk said the tweet was a joke, but new reports indicate that he may be taking a closer look at the team. Here’s the latest on the potential sale of Manchester United.
What Happened: In August, Musk jokingly said he was going to purchase Manchester United MANU, a publicly traded soccer team controlled by the Glazer family. Months later, the Glazer family announced they were exploring a potential outright or partial stake sale of the team.
“As part of this process, the Board will consider all strategic alternatives, including new investment into the club, a sale, or other transactions involving the company,” Manchester United said in November 2022 with a note it was “exploring strategic alternatives.”
Musk is “monitoring” the potential sale process of Manchester United, with a deadline for bids reported to be Friday, according to the Daily Mail.
The purchase of the team would come after Musk purchased social media platform company Twitter for $44 billion in 2022. Musk now finds himself as the CEO of Tesla Inc TSLA, Twitter and SpaceX.
Musk's followers reacted with excitement last year when he tweeted, “I’m buying Manchester United ur welcome.” He later clarified that it was a “long-running joke on Twitter” and he wasn’t serious.
“Although, if it were any team, it would be Man U. They were my fav team as a kid,” Musk replied.
Valued at $178 billion by Bloomberg, Musk is one of the few individuals who could buy the team outright and could find himself in a bidding battle with other interested parties. Musk could also team up on a bid with another individual or party.
The acquisition of Twitter and subsequent funding needed to get the social media platform on track could cause Musk to think twice about making a large investment like the purchase of Manchester United. Add in the possibility of the team needing to pay for a new stadium, and it could be too big of an investment for the Tesla CEO, who already has his hands full.
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The Potential Bidders: Interest in Manchester United has come from wealthy individuals and investment groups in Saudi Arabia, Qatar and the United Kingdom.
Several investors from Saudi Arabia are big backers of Twitter and could be interested in teaming up with Musk on a bid.
Shares of Manchester United rose last week on news that “high-wealth individuals” in Qatar were interested in buying the team and could be providing a “massive offer” for the team soon.
Qatari Sports Investments was one of the investors linked to the team, and was also considering investments in other Premier League teams.
A Bloomberg report linked the Qatar Investment Authority, a sovereign wealth fund, to a bid on the team. The ruling emir of Qatar Sheikh bin Hamad Al Thani is a reported Manchester United fan, which could increase the country’s interest in acquiring the team.
With Qatari Sports Investments owning French club Paris Saint-Germain and Saudi Arabia’s Public Investment Fund owning EPL Newcastle, there could be concern over parties involved with either being linked to a bid due to UEFA rules. Splitting up ownership between Musk and other parties could end up being a way around this.
Jim Ratcliffe, who is one of the richest individuals in the United Kingdom, is said to be putting in a bid on Manchester United. Ratcliffe, who is a long-time fan and supporter of the team, has the backing of Goldman Sachs and JPMorgan for financing, according to reports.
What’s Next: If Musk does find himself in the hunt for acquiring Manchester United, it could put temporary pressure on Tesla shares. During the months of the Twitter acquisition, Tesla shares fell and traded down due to what many considered an “overhang” effect of getting the deal to go through.
Musk also sold Tesla shares on several occasions to help finance the Twitter acquisition and give himself extra capital as needed for the social media platform.
As of December, Musk owns 423,622,432 shares of Tesla, representing 13.4% of the company. While Musk is extremely wealthy and the second-richest person in the world, much of his wealth is tied to ownership stakes in Tesla and SpaceX, which could mean he would need to sell a portion of these stakes to complete a deal for Manchester United.
Manchester United shares are up 75% in the last year as sale rumors have heated up. The company traded with an enterprise value of $4.65 billion, which could still be well below where a final sale price lands.
The EPL team has a paper valuation of $4.6 billion and $4.7 billion from Forbes and Sportico respectively. Many have pointed to the Glazer family wanting over $7 billion for a full sale of the team. Benzinga previously calculated the sale price of Manchester United to come in a range of $4.65 billion to $8.28 billion using valuation metrics.
MANU Price Action: Manchester United shares trade at $23.70 versus a 52-week trading range of $10.41 to $25.51.
Photo: Jonathan Borba on Pexels and Courtesy Photo on Wikimedia Commons and logo on Wikipedia
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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