Connect with us

Published

on

Sir Jim Ratcliffe is to commit $300m (£245m) from his multibillion pound fortune to Manchester United Football Club’s ageing infrastructure as part of a deal to acquire a 25% stake that will be unveiled this month.

Sky News can exclusively reveal that Sir Jim, founder of the Ineos petrochemicals empire, will pledge the investment alongside the acquisition of a shareholding likely to be worth more than £1.25bn.

Sources said on Friday that the £245m investment would be staggered, with the bulk of it being handed to the club by the end of the year.

They added that it would be financed by Sir Jim personally and would not add to Manchester United’s existing borrowings.

Sir Jim’s purchase of a 25% stake in the Red Devils – first revealed by Sky News last month – will come almost exactly a year after the Glazer family, which has controlled the club since 2005, began formally exploring a sale.

Adding together the cost of the stock purchase and the other capital for investment means that Sir Jim will be committing about £1.5bn on day one of his United interest, although that figure could vary depending on the price he ultimately pays for the shares.

After months of negotiations with several potential buyers, including the Qatari businessman Sheikh Jassim bin Hamad al-Thani, the British billionaire’s acquisition of a minority stake has emerged as the Glazers’ preferred option.

Sheikh Jassim bin Hamad al-Thani
Pic:QIB
Image:
Sheikh Jassim bin Hamad al-Thani
Pic:QIB

The deal is expected to be announced within a fortnight, although negotiations between Sir Jim’s team and the Glazers are ongoing, meaning that the timetable for an announcement remains subject to change.

One source close to the talks said the additional $300m investment would be focused on United’s physical infrastructure, and not on addressing deficiencies on the playing side of the club.

The men’s first team has been plunged into crisis after successive 3-0 home defeats in the Premier League by Manchester City, and then by Newcastle United in the Carabao Cup.

Manager Erik Ten Hag is facing intense pressure to turn United’s season around, with a Premier League visit to Fulham this weekend followed by a crucial Champions League game at FC Copenhagen next Wednesday.

The incremental sum to be pledged by Sir Jim will address the concerns of observers who have questioned whether Manchester United will benefit from new investment in Old Trafford, which has fallen well behind the stadia of rivals such as Arsenal, Manchester City and Tottenham Hotspur.

However, United’s home is likely to need far more than £245m to deliver the overhaul required to turn it into one of the world’s elite football grounds again.

Sir Jim is understood to be committed to investing additional sums in future, although it was unclear on Friday whether these will be publicly discussed at the time of the stake purchase.

Several other key questions remain about United’s future ownership, including whether Sir Jim will ultimately seek overall control of the club.

Reports in recent weeks have suggested that he will take immediate control of football matters at the club, alongside Ineos Sports colleagues including Sir Dave Brailsford, the former cycling supremo.

Another area of uncertainty is the precise mechanism that Sir Jim will use to acquire 25% of both the publicly traded A-shares and the class of B-shares held by the six Glazer siblings, which carry the overwhelming majority of voting rights.

Analysts have suggested that it could be undertaken through a process known as a tender offer.

The price that Ineos Sports will offer has also yet to be disclosed, although it will be at a very substantial premium to the $17.92 at which they closed on the New York Stock Exchange on Thursday.

Some United fans have expressed disquiet at the prospect of Sir Jim buying a minority stake given that it paves the way for the Glazers’ continued control.

Manchester United fans
Image:
Manchester United fans have been left frustrated by the club’s continued ownership under the Glazer family

The family, who paid just under £800m to buy the club in 2005, has remained inscrutable throughout the process and has said nothing of substance to the NYSE since the process of engaging with prospective buyers kicked off last November.

Earlier iterations of Sir Jim’s offers for the club, which focused on gaining outright control, included put-and-call arrangements that would become exercisable three years after a takeover to enable him to buy out the remainder of the club’s shares.

The Monaco-based billionaire, who owns the Ligue 1 side Nice, pitched a restructured deal last month in an attempt to unblock the ongoing impasse over United’s future.

In addition to the competing bids from Sir Jim and Sheikh Jassim, the Glazers received several credible offers for minority stakes or financing to fund investment in the club.

These include an offer from the giant American financial investor Carlyle; Elliott Management, the American hedge fund which until recently owned AC Milan; Ares Management Corporation, a US-based alternative investment group; and Sixth Street, which recently bought a 25% stake in the long-term La Liga broadcasting rights to FC Barcelona.

These were designed to provide capital to overhaul United’s ageing physical infrastructure.

Part of the Glazers’ justification for attaching such a huge valuation to the club resides in the possibility of it gaining greater control in future of its lucrative broadcast rights, alongside a belief that arguably the world’s most famous sports brand can be commercially exploited more effectively.

United’s New York-listed shares have gyrated wildly in recent months as reports have suggested that either a deal is close or that the Glazers were about to formally cancel the sale process.

Please use Chrome browser for a more accessible video player

September: Why Man United’s share price has sunk

Earlier this year, Manchester United’s largest fans’ group, the Manchester United Supporters Trust, called for the conclusion of the auction “without further delay”.

The Glazers’ tenure has been dogged by controversy and protests, with the absence of a Premier League title since Sir Alex Ferguson’s retirement as manager in 2013 fuelling fans’ anger at the debt-fuelled nature of their takeover.

Fury at its proposed participation in the ill-fated European Super League project in 2021 crystallised supporters’ desire for new owners to replace the Glazers.

Confirming the launch of the strategic review last November, Avram and Joel Glazer said: “The strength of Manchester United rests on the passion and loyalty of our global community of 1.1bn fans and followers.

“We will evaluate all options to ensure that we best serve our fans and that Manchester United maximizes the significant growth opportunities available to the club today and in the future.”

The Glazers listed a minority stake in the company in New York in 2012.

“Love United, Hate Glazers” has become a familiar refrain during their tenure, with supporters critical of a perceived lack of investment in the club, even as the owners have reaped large dividends as a result of its ability to generate sizeable profits.

Ineos and Manchester United both declined to comment.

Continue Reading

Business

At least 13 people may have taken their own lives linked to Post Office scandal, public inquiry finds

Published

on

By

At least 13 people may have taken their own lives linked to Post Office scandal, public inquiry finds

At least 13 people may have taken their own lives after being accused of wrongdoing based on evidence from the Horizon IT system that the Post Office and developers Fujitsu knew could be false, the public inquiry has found.

A further 59 people told the inquiry they considered ending their lives, 10 of whom tried on at least one occasion, while other postmasters and family members recount suffering from alcoholism and mental health disorders including anorexia and depression, family breakup, divorce, bankruptcy and personal abuse.

Follow latest on public inquiry into Post Office scandal

Writing in the first volume of the Post Office Horizon IT Inquiry report, chairman Sir Wyn Williams concludes that this enormous personal toll came despite senior employees at the Post Office knowing the Horizon IT system could produce accounts “which were illusory rather than real” even before it was rolled out to branches.

Sir Wyn said: “I am satisfied from the evidence that I have heard that a number of senior, and not so senior, employees of the Post Office knew or, at the very least, should have known that Legacy Horizon was capable of error… Yet, for all practical purposes, throughout the lifetime of Legacy Horizon, the Post Office maintained the fiction that its data was always accurate.”

Referring to the updated version of Horizon, known as Horizon Online, which also had “bugs errors and defects” that could create illusory accounts, he said: “I am satisfied that a number of employees of Fujitsu and the Post Office knew that this was so.”

The first volume of the report focuses on what Sir Wyn calls the “disastrous” impact of false accusations made against at least 1,000 postmasters, and the various redress schemes the Post Office and government has established since miscarriages of justice were identified and proven.

Please use Chrome browser for a more accessible video player

‘It stole a lot from me’

Recommendations regarding the conduct of senior management of the Post Office, Fujitsu and ministers will come in a subsequent report, but Sir Wyn is clear that unjust and flawed prosecutions were knowingly pursued.

“All of these people are properly to be regarded as victims of wholly unacceptable behaviour perpetrated by a number of individuals employed by and/or associated with the Post Office and Fujitsu from time to time and by the Post Office and Fujitsu as institutions,” he says.

What are the inquiry’s recommendations?

Calling for urgent action from government and the Post Office to ensure “full and fair compensation”, he makes 19 recommendations including:

• Government and the Post Office to agree a definition of “full and fair” compensation to be used when agreeing payouts
• Ending “unnecessarily adversarial attitude” to initial offers that have depressed the value of payouts, ⁠and ensuring consistency across all four compensation schemes
• The creation of a standing body to administer financial redress to people wronged by public bodies
• Compensation to be extended to close family members of those affected who have suffered “serious negative consequences”
• The Post Office, Fujitsu and government agreeing a programme for “restorative justice”, a process that brings together those that have suffered harm with those that have caused it

Regarding the human impact of the Post Office’s pursuit of postmasters, including its use of unique powers of prosecution, Sir Wyn writes: “I do not think it is easy to exaggerate the trauma which persons are likely to suffer when they are the subject of criminal investigation, prosecution, conviction and sentence.”

He says that even the process of being interviewed under caution by Post Office investigators “will have been troubling at best and harrowing at worst”.

Read more:
Post Office inquiry lays bare heart-breaking legacy – analysis

‘Hostile and abusive behaviour’

The report finds that those wrongfully convicted were “subject to hostile and abusive behaviour” in their local communities, felt shame and embarrassment, with some feeling forced to move.

Detailing the impact on close family members of those prosecuted, Sir Wyn writes: “Wives, husbands, children and parents endured very significant suffering in the form of distress, worry and disruption to home life, in employment and education.

“In a number of cases, relationships with spouses broke down and ended in divorce or separation.

“In the most egregious cases, family members themselves suffered psychiatric illnesses or psychological problems and very significant financial losses… their suffering has been acute.”

The report includes 17 case studies of those affected by the scandal including some who have never spoken publicly before. They include Millie Castleton, daughter of Lee Castleton, one of the first postmasters prosecuted.

Please use Chrome browser for a more accessible video player

Three things you need to know about Post Office report

She told the inquiry how her family being “branded thieves and liars” affected her mental health, and contributed to a diagnosis of anorexia that forced her to drop out of university.

Her account concludes: “Even now as I go into my career, I still find it so incredibly hard to trust anyone, even subconsciously. I sabotage myself by not asking for help with anything.

“I’m trying hard to break this cycle but I’m 26 and am very conscious that I may never be able to fully commit to natural trust. But my family is still fighting. I’m still fighting, as are many hundreds involved in the Post Office trial.”

Business Secretary Jonathan Reynolds said the inquiry’s report “marks an important milestone for sub-postmasters and their families”.

He added that he was “committed to ensuring wronged sub-postmasters are given full, fair, and prompt redress”.

“The recommendations contained in Sir Wyn’s report require careful reflection, including on further action to complete the redress schemes,” Mr Reynolds said.

“Government will promptly respond to the recommendations in full in parliament.”

Continue Reading

Business

Public finances in ‘relatively vulnerable position.’, OBR warns

Published

on

By

Public finances in 'relatively vulnerable position.', OBR warns

The UK’s public finances are in a “relatively vulnerable position”, the government’s official forecaster has warned.

The Office for Budget Responsibility (OBR) cited a drag from successive economic shocks, recent U-turns on spending cuts and higher-than-expected policy commitments.

It sounded alarm over the projected path for debt as a result, in its annual fiscal risks and sustainability report.

It saw total debt above 270% of gross domestic product (GDP) by the early 2070s – up from a current level of 96.5% – declaring that rising debts have led to “a substantial erosion of the UK’s capacity to respond to future shocks”.

Money latest: Amazon launches 24/7 grocery deliveries

The OBR’s report highlighted damage from the COVID pandemic and cost of living crisis that followed Russia’s invasion of Ukraine.

But it raised fears that past and current government policies were further harming the sustainability of the public finances.

More from Money

The report said that the pension triple lock, for example, was now estimated to cost £15.5bn annually by 2029-30.

That was “around three times higher than initial expectations”, it said.

The lock, which rises each year in line with inflation, wage growth or 2.5% – whichever is higher – had risen by more than the 2.5% base in eight of the 13 years of operation to date, the report stated.

The watchdog said it reflected more volatile inflation than expected.

It also picked up on the latest government U-turns over planned welfare and winter fuel payment cuts in the face of rebellions by Labour MPs.

Please use Chrome browser for a more accessible video player

Welfare U-turn ‘has come at cost’

The decisions are expected to leave Chancellor Rachel Reeves facing a black hole of £6.75bn while weaker-than-expected economic growth could add a further £9bn to that sum in the run-up to the autumn budget, according to Sky News projections that see a void of around £20bn.

The OBR highlighted future risks from rising defence spending and the impact of climate change.

Public sector pay demands could also prove a drag, with resident doctors voting in favour of strikes over pay.

While ministers acknowledge damage to the public purse from the U-turns, Ms Reeves has repeatedly ruled out a new wave of borrowing to fund a spending spree.

Please use Chrome browser for a more accessible video player

Could the rich be taxed to fill black hole?

As such, the government has not ruled out the prospect of some form of wealth tax to help meet its commitments despite the top 1% of earners contributing almost a third of all income tax already – on top of other targeted taxes such as capital gains.

The report said: “Efforts to put the UK’s public finances on a more sustainable footing have met with only limited and temporary success in recent years in the aftermath of the shocks, debt has also continued to rise and borrowing remained elevated because governments have reversed plans to consolidate the public finances.

“Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned.”

Shadow chancellor Mel Stride said of the report: “The OBR’s report lays bare the damage: Britain now has the third-highest deficit and the fourth-highest debt burden in Europe, with borrowing costs among the highest in the developed world.

“Under Rachel Reeves’ economic mismanagement and Keir Starmer’s weak leadership, our public finances have become dangerously exposed – vulnerable to future shocks, welfare spending rising unsustainably, taxes rising to record highs and crippling levels of debt interest.

“Labour’s recklessness risks it all – your pension, your job, your home, your savings.”

A Number 10 spokesman said: “We recognise the realities set out in the OBR’s report and we’re taking the decisions needed to provide stability to the public finances.”

Continue Reading

Business

UK to miss deadline to agree steel and aluminium tariffs

Published

on

By

UK to miss deadline to agree steel and aluminium tariffs

The UK will miss the White House-imposed deadline to agree a trade deal on steel and aluminium this week, according to insiders from government and industry.

Donald Trump had insisted that unless Britain could finalise the details of its metals trade deal with the US by 9 July, he would raise the tariffs faced by steel and aluminium imports from the 25% the UK currently pays to the 50% paid by other countries. If it could seal the deal, those tariffs could drop to zero.

Money blog: 10 happiest and unhappiest professions for shift workers

However, despite weeks of negotiations and promises that the deal would be completed by the end of June, talks have foundered on two key issues. First, the US is insisting that only steel “melted and poured” in the UK (in other words, forged in blast furnaces or electric arc furnaces) can be included in the deal. However, one of Britain’s biggest steel exporters to the US, Tata Steel, is not melting and pouring its UK steel because of the closure of its blast furnaces.

Second, the US is wary of the fact that while the government has taken control of British Steel, which operates Britain’s last remaining blast furnaces in Scunthorpe, the company itself still legally has Chinese owners.

Government insiders have told businesses they still expect to have a deal done by the end of this month, and that they are confident the White House will not impose the 50% tariffs for the time being. They say one of the chief challenges they face is that the administration is so overwhelmed by attempts to negotiate with other countries that they lack the bandwidth to deal with the small print on Britain’s deal.

Please use Chrome browser for a more accessible video player

Inside the UK’s last blast furnaces

“As far as the Americans are concerned, the UK is already a done deal,” said one person close to the negotiations. The problem is that while a deal has been done on car and aerospace exports to the US, the metals element of the trade agreement is still some way from being signed. In the meantime, steel exports continue to incur tariffs – albeit lower than those imposed on other countries around the world.

Continue Reading

Trending