Kieran Maguire: Man United must solve ‘outstanding’ £223m issue as takeover on the line
Man United must address an “outstanding” £222.8million debt bill that is subject to variable interest rates before a takeover can be complete – but it is unlikely to deter prospective bidders.
That is the view of finance guru Kieran Maguire, speaking exclusively to Football Insider about the Red Devils’ debt in relation to the current global financial situation.
The Independent reported last Wednesday (18 August) that three consortiums are eyeing a formal bid to buy the club from the Glazers.
It is understood that the American family currently value the club at around £6billion.
But it is also noted that £222.8m of United’s debt is vulnerable to fluctuations in global interest rates and is thus likely to affect the potential sale price.
Maguire explains that, while the issue must be resolved before a takeover can take place, the sums involved would pale in comparison next to the club’s value.
“When you do any merger and acquisition work, you look at risk,” he told Football Insider’s Adam Williams.
“If interest rates are risk-free, you know exactly what you are acquiring. However, it is fairly standard in a deal to have what’s known as a control clause in respect of any borrowings.
“It’s likely that the lenders will try to renegotiate either with the club or the new owners. So, until that variable cost is addressed, there is an outstanding issue.
“But the numbers involved are so insignificant that it will not act as a deterrent, in my view.
“If you’re spending £4bn or £5bn on a football club, an extra interest cost of £1m per year is neither here nor there.”
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