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Saudi takeover of Manchester United faces huge obstacles

17:18 GMT+4 26/11/2019
Mohammad bin Salman
It had been mooted in some quarters that a takeover from the Middle East was imminent but there are currently no plans for the club to be sold

There are no immediate plans for Manchester United to be sold to Saudi Arabian investors or any other buyer.

A flurry of recent speculation came in the wake of Group Managing Director Richard Arnold’s recent trip to Saudi Arabia and, with the regular visits of United executives to the country, some reports indicated that a sale of the club was likely.

That impression was reinforced at the end of the summer transfer window when United brought in just three signings. That lack of activity led to suggestions that the Glazer family was cutting costs and maintaining a positive cash balance in order to make the club more attractive financially. 

However, executive vice-chair Ed Woodward is ready to greenlight major purchases in January, with targets including Erling Braut Haaland, Jadon Sancho, Declan Rice and Mario Mandzukic.

Such longer-term planning reinforces the fact that there is no imminent sale on the cards. The frequent trips to Saudi Arabia can be explained by an existing commercial relationship between United and the kingdom.

United’s market valuation is currently set at $2.68 billion (£2.07 billion), and it would require a bid of around $4 billion (£3.09 billion) before the majority owners the Glazers would be seriously tempted to sell out. The recent proposed sale of Kevin Glazer’s privately-held shares will have little impact on the control of the club or the plans of the rest of the family.

There is a further obstacle to any takeover approach by investors in Saudi Arabia. Key figures in the kingdom have their wealth and authority essentially patronised by Prince Mohammad bin Salman and other figures in the Saudi royal family. Almost uniformly, that wealth depends on the future of Saudi Aramco, the largest oil producer in the world. It remains an undeniably profitable setup, but there are signs of trouble on the horizon.

The sale of shares in Aramco on the open market had been planned for a major international stock market such as the London or New York Stock Exchange. Instead, the shares will now be sold only to Middle Eastern investors, as major international banks baulked at the proposed value of Aramco.

That means Saudi Arabia will now raise less from the listing than earlier anticipated. With the money brought in intended to modernise the economy and to be invested around the world, in assets such as Manchester United, purchasing ambitions may have to be scaled down.