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Re: Red Knights 'to drop £1bn Man Utd bid'
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They overpaid by about 60p per share back in 2005. United was fair value then at nearer £625m. Given the increases in income since then, you'd probably get a decent stab at £900m to £1 billion, around 10 or 11 times EBITDA. The problem is, the Glazers put so little in, their "equity" doesn't look like very much. £900m less the bond debt, less the PIK debt would leave them with just £170m or about £100m less than what they "invested." Forbes valued it at £1.2 billion not so long ago, but again their formula is more esoteric than scientific. Listening to the recent press coverage, the "Knights" have been talking £1 billion and the Glazers' mention of £1.5 billion offers suggests both parties would probably meet in the middle around the Forbes figure. J P Morgan see United's income dropping £15m a year in the near future, so we'll have to see how things play out. If we see the EBITDA drop below £80m, I think the Glazers will have real problems finding anyone willing to pay over £900m. That will also impact on the need for a refinance of the whole £1.1 billion debt in 2017, unless they strip £70m out of United now and another £25m a year just to keep the PIK debt at £150m. Then they will need to refinance just (JUST?) £650m on a value of £900m. |
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Re: Red Knights 'to drop £1bn Man Utd bid'
gross, even crass undervaluation imo. as you say, normal business rules are irrelevant. what is far more relevant is the recent sponsorship activity and the potential to raise revenues as the expansion of the PL brand continues globally at apace, with, again potentially, web media in particular set to explode
totally pointless speculating what may or may not happen by, or in, 2017 as well, as I think we may have discussed previously. such speculation is about as relevant as factoring the bond issue into pre 2010 figures, or tipexing in the signing of Henrik Laarson into pre January 2007 transfer window speculation hard to countenance an idea that these so-called knights would place such a low value on a club they supposedly love in an attempt to get it on the cheap. |
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Re: Red Knights 'to drop £1bn Man Utd bid'
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That's a bit odd if you don't mind me saying so. In addition, why would any potential buyer publicly seek to inflate the value of a purchase, or a seller look to undermine their position leaving them open to receive less? Regardless of the value, I believe the debt position will determine the cost of buying United as the Glazers will want their original investment plus "X." The difficulty is estimating "X." |
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Re: Red Knights 'to drop £1bn Man Utd bid'
i think you can take increased revenue in the future as a given tbh, although it would be interesting to see what might happen should BSkyB have captured the tv football market completely at some point.
the point about speculating on debt maturity is that you can only react. no-one had factored in a bond issue into their debt maturity speculation at any point in the 5 years leading up to it being issued. nobody, certainly not outside the loop anyway, knew it was going to happen. or if they did, then they chose not to mention it. the whole thing is a dynamic that cannot be pinned down. forecasting to 2017is pretty pointless imo. I agree of course re inflating a value/undermining of a position, and you may well be right about the potential exit strategy. however, you also need to factor in how necessary or otherwise the owner's need is for an exit strategy, and that i'm afraid is not known, regardless of the recent media campaign. |
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Re: Red Knights 'to drop £1bn Man Utd bid'
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won't bother responding to you blather bit by bit suffice it to say that you're making stuff up, almost certainly because you're a #@&%! when did i ever say that i'm against a buy out? |
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Re: Red Knights 'to drop £1bn Man Utd bid'
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Re: Red Knights 'to drop £1bn Man Utd bid'
the bond issue was a very obvious mechanism, yet it was not part of the forecasts.
bearing in mind the bond issue and the collapse of lehman, forecasting to 2017 remains pointless in terms of the value of United, and increasingly so. i agree, in terms of PR campaigns etc it has its place. |
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