Manchester United shares surge on stake sale news

NEW YORK – Manchester United (NYSE: NYSE:) shares soared in pre-market trading today after reports emerged of British billionaire Sir Jim Ratcliffe’s intention to acquire a significant stake in the iconic football club. The proposed deal involves Ratcliffe purchasing a 25% stake at $33 per share, which is a substantial increase from Thursday’s closing price of $18.43.

The transaction, valued at approximately $3.04 billion, includes Class A and B shares that carry voting rights and are currently held by the Glazer family. The family, which has owned Manchester United for several years, is working through Ineos Sports to finalize the sale before the U.S. Thanksgiving holiday next week.

Fans and investors alike have been closely monitoring the club’s ownership situation, with many expressing their desire for new investment and direction. The acquisition by Ratcliffe, who already has sports investments through his company Ineos, including the cycling team formerly known as Team Sky and French football club OGC Nice, signals a potential shift in Manchester United’s strategy and governance.

The market reaction underscores the significance of this development for one of the world’s most famous football clubs. With the Glazer family at the helm since 2005, Manchester United has experienced mixed fortunes on and off the pitch, leading to calls for change among its global fanbase.

As details continue to emerge about the proposed acquisition, stakeholders are hopeful that this new chapter could herald a return to success and stability for Manchester United.

InvestingPro Insights

As the market responds to the potential acquisition of a significant stake in Manchester United (NYSE: MANU) by British billionaire Sir Jim Ratcliffe, it’s crucial to consider some key financial metrics and insights from InvestingPro.

The company’s gross profit margins have been impressive, standing at 84.39% in the last twelve months as of Q4 2023. This suggests the firm’s ability to generate substantial profits after direct costs, which could be a positive sign for potential investors like Ratcliffe. However, it’s worth noting that Manchester United has not been profitable over the last twelve months, with a P/E Ratio of -88.33, indicating that the company is currently operating at a loss.

As an InvestingPro Tip, the company’s short-term obligations exceed its liquid assets, which could pose a potential financial risk. Additionally, the company is trading at a high Price / Book multiple of 24.74, which may suggest that the firm’s shares are overvalued relative to its net assets.

For those interested in more detailed insights and tips, InvestingPro offers a wealth of information, including an additional four tips for Manchester United. As part of a special Black Friday sale, a subscription to InvestingPro is currently available with a discount of up to 55%.

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