Glazer bid to buy United plc in disarray as bank backs out

Mr Malcolm Glazer's bid to buy Manchester United plc appeared to be in tatters last night after his financial backer walked away from the deal.

US bank, JP Morgan Chase, disassociated itself from Mr Glazer late yesterday after he blocked the election of three directors to the company's board at its annual general meeting (AGM) in Old Trafford in Manchester.

JP Morgan was to provide a £500 million (€715 million) loan to fund Mr Glazer's £3 a share bid for the company, which valued it at just over €1.1 billion.

Mr Glazer's bid hinged on the bank's support. Unless another financier emerges, he will not be able to continue with his efforts to take over the company. He has already spent an estimated €265 million building a 28.1 per cent stake in the business.

London PR firm, Brunswick, which was advising Mr Glazer, also ended its association with him last night. Sources close to both said that they took on their respective jobs on the basis of the bid being friendly.

"Any aggressive action we were not part of and we cannot support, we cannot help him on this basis," the source told Reuters.

Earlier, the Glazer Family Partnership voted against the re-election of non-executive directors, Mr Maurice Watkins and Mr Philip Yea, and the election of Mr Andy Anson, to the board of the company in a poll taken at the AGM.

All three candidates were defeated by a margin of 74 million shares to 35 million shares.

In a statement, the Manchester United board confirmed that all three had lost the vote. "This was principally a result of the Glazer Family Partnership voting against the resolution," it said. "Had the Glazer Family abstained or voted in favour of these resolutions, they would have been passed."

The board recently shot down Mr Glazer's indicative offer on the basis that if it had succeeded, it would have left the company with an excessive debt burden.

It also refused to allow his advisers to carry out a due diligence examination of the company's affairs.

Sources speculated yesterday that he could seek an extraordinary general meeting (EGM) to force the board to open the company's books to him.

Irish bloodstock and racing supremos, Mr John Magnier and Mr JP McManus, who own 28.9 per cent of the company through Cubic Expression, also walked away from talks with Mr Glazer. They abstained from voting on the resolutions to elect the directors to the board yesterday.

At the meeting, Manchester United chairman, Sir Roy Gardner, told a gathering of 1,200 stakeholders that the board intended to talk to the company's major shareholders in an effort to end the uncertainty over its ownership.

"What we want to do is to talk to the major shareholders in detail and try to find some solution to the shareholder structure," he said. He added that these steps would be taken "imminently".

Those who attended the meeting yesterday were by and large fans who have small shareholdings in the company. Around 35,000 supporters hold just over 16 per cent of the company. They are opposed to Mr Glazer's bid.

All the speakers from the floor yesterday demanded that the board reject any offer that the US businessman might make for the company.

However, Sir Roy repeatedly warned that the board was legally obliged to look at all offers and to act in the interest of all shareholders.

After the meeting, Mr Sean Bones, vice-president of fans' organisation Shareholders' United, told The Irish Times that the fans could grow their stake to 25 per cent over a relatively short period.