The deal, which could be confirmed later today, will bring to an end a year-long sale process. The Glazer family announced last November that they were exploring “strategic alternatives” for the club, including a possible sale, and were open to fresh investment.
Ratcliffe’s offer represents a premium of 79.1% to the stock’s closing price yesterday of US$18.43, valuing the Old Trafford club at about US$5.4 billion excluding debt. Manchester United’s US-listed shares rose 9.5% to US$20.10 in early trading today.
While the deal will not see the back of the Glazers, who are deeply unpopular with the fans of the 20-time English Premier League champions, it will result in major changes to the way the club is run.
Ratcliffe wants to overhaul the club’s football operations. It has underperformed on the pitch since former manager Alex Ferguson retired in 2013 following a period of unprecedented success for the club.
Ratcliffe has promised sweeping changes. The club announced on Wednesday that chief executive officer Richard Arnold would depart after less than two years in the top job. Other executives are expected to leave after the deal is finalised, sources say.
The deal values Manchester United above Premier League rivals Chelsea, which was sold by Russian businessman Roman Abramovich last May for US$5.2 billion – including debt and investments – to an investment group led by US billionaire Todd Boehly and private equity firm Clearlake Capital.
Manchester United generates more revenue and has a larger fan base than its London rival.
Including debt, the deal values Manchester United at between US$6 billion and $6.5 billion, in line with what Reuters had previously reported.
Manchester United declined to comment.
Ratcliffe, also the chair of petrochemicals firm Ineos, is expected to take overall control of the club’s player recruitment if the deal is finalised, according to sources.
The Glazer family has faced intense criticism from fans over its handling of this key part of the club’s operations.
The family, which made its fortune in real estate, retail, and healthcare, and owns the NFL’s Tampa Bay Buccaneers, bought the team for £790 million in 2005.
The six descendants of American businessman Malcolm Glazer, who died in 2014, currently control 96% of Manchester United’s voting stock.
The deal structure that Ratcliffe has proposed would allow members of the Glazer family, as well as other shareholders, to partially cash out, one source told Reuters.
It is not clear if Ratcliffe is planning a full takeover in the future or if the Glazers would be open to an outright sale.
Ratcliffe founded Ineos in 1998 and is the chemical group’s chairman and chief executive officer, with a two-thirds stake. Forbes pegs Ratcliffe’s net worth at US$18.7 billion.
The British billionaire is no stranger to the business of sports. Ineos owns French Ligue 1 club Nice, Swiss Super League side FC Lausanne-Sport, and works with partner club Racing Club Abidjan of Ivory Coast Ligue One. It is also behind the Grenadiers, one of the world’s most successful cycling teams.