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17 May 2005
Glazer In Talks With Casino Mogul
'To Help Pay For United'
As
Malcolm Glazer yesterday took full control of Manchester
United by raising his stake above 75 per cent, it emerged
that he has been in secret talks with a controversial
billionaire casino mogul over ways in which Glazer might
exploit Britain's boom in gambling to help pay for his
acquisition of United.
A week ago, United
announced a joint venture with Las Vegas Sands, an American
casino firm, to build a massive gambling complex on land
adjacent to Old Trafford. LVS is owned by Sheldon Adelson,
the world's 19th richest man, who was once described as
"perhaps the most vilified man in Nevada".
The day after United and
LVS announced their link-up, Glazer, who had long been aware
that United were trying to enter the casino business,
executed his coup to buy out United's major shareholders,
John Magnier and J P McManus. That purchase gained him
effective control of United, which is now formally owned by
a Glazer investment vehicle, Red Football Partnership. RFP's
official headquarters, for tax and legal reasons, is based
in Reno, Nevada, not far from Adelson's own HQ. It is not
known whether there is a specific reason, related to casino
ownership, that Glazer based RFP in Nevada.
Although the super-casino
at Old Trafford is likely to face hurdles, including
possible protests from British unions on the basis of
Adelson's employment record in America, it might hold one
clue as to why Glazer feels United can become profitable for
him.
Casinos have helped
Adelson, 71, amass a fortune of some £8bn, and his
showpiece venue, the Venetian in Las Vegas (which has its
own Grand Canal and a replica of St Mark's Square), is the
largest and most profitable in the city. His business
practices were condemned in the House of Commons last year
by the Labour MP Andrew Dismore.
Glazer confirmed yesterday
that he had raised his holding in United to 75.7 per cent,
as part of his £790m takeover of the entire
club.
Now that the 75 per cent
threshold has been passed, Glazer can delist Manchester
United plc from the London Stock Exchange and implement new
plans for the club without having to seek approval from
other shareholders.
The delisting is likely
within a month or two. Glazer can also load the club with
the debts he has acquired to buy United, starting with the
£265m he has borrowed in bank loans. It is likely that
within months he will also restructure more debt, of
£275m in "preference shares", to make the club directly
liable for that too.
Glazer's next step will be
to send his offer document to shareholders giving detailed
information about the share offer. That will put in place a
timetable from the UK's Takeover Panel giving Glazer a
60-day period in which to complete his acquisition. The
offer document is expected to be posted some time this
week.
A major concern is where
he intends to make fresh profits. Ticket price hikes are
likely. Naming rights to the stadium are probable. A sale
and leaseback of Old Trafford is also possible. But
expanding other revenue streams, including breaking up the
Premier League's TV rights' deal, are more problematic. A
casino business, in Manchester or over a wider area, could
be Glazer's answer.
Glazer has failed so far
to make any public statement over his business plan, which
United's chief executive, David Gill, has described as
"aggressive".
Gill could yet find
himself in the extraordinary position of working for Glazer,
although neither he nor his manager, Sir Alex Ferguson, have
commented on whether they intend to stay.
A meeting of some fans'
groups will be held in Manchester today, to take the first
steps towards establishing a breakaway club.
"We are calling on all
supporters to wear black in Cardiff on Saturday," said a
supporters' spokesman, Mark Longden. "In addition, people
should decline to renew their season tickets and memberships
and cancel subscriptions to MUTV.
"We would also urge them
to boycott the products of sponsors such as Vodafone, Nike,
Budweiser and Audi and explain to those companies
why."
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