Bloomberg News

Baron Capital Increases Stake in Manchester United to 2.5%

March 11, 2014

U.S. investment firm Baron Capital has acquired almost a quarter of all shares made available on the New York Stock Exchange by Manchester United, the record 20-time English soccer champion that’s struggling this season.

United said in a filing to the Securities and Exchange Commission yesterday that New York-based Baron bought 24.1 percent of the shares floated in 2012 by its owners, the Glazer family. They had listed 10 percent, and Baron now holds 2.5 percent in the club. United has a market value of $2.6 billion.

News of the shareholding comes amid speculation that United is on the verge of signing the richest apparel deal in soccer history with Nike Inc. (NKE:US) A story published by the Sunday Mirror two days ago, and followed up by media in the U.K. and the U.S., said the world’s largest sporting goods maker will pay $1 billion over 10 years to renew its relationship with the Red Devils, even though the team is enduring its worst slump in more than two decades. Nike and United haven’t commented on the reports.

United shares jumped 6.2 percent yesterday, and were little changed at $15.82 in early trading in New York today.

The stock price has dropped since the club named David Moyes last May to replace Alex Ferguson, who led the team throughout its most successful period. The shares fell to $14.47 in February, having traded as high as $19.04 last May as Ferguson was leading the team to the Premier League title.

‘Remain Positive’

“Shares of Manchester United dropped in Q4 due to a delay in the signing of a new global merchandise deal with Nike and the team’s poor performance on the field,” Baron said in a note on its website. “The Nike deal is still expected to be signed, but has been pushed out from this fiscal year. We remain positive on the company’s prospects going forward.”

Three-time European Cup-winner United is likely to miss out on millions of dollars in revenue next season as it seems likely to fail to reach European soccer’s elite Champions League for the first time in 19 years. United is sixth in the Premier League with 10 games to go, nine points behind cross-town rival Manchester City, which occupies the fourth and final Champions League qualification spot.

To contact the reporter on this story: Tariq Panja in Rio de Janeiro at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net


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