What happened
A deep-pocketed bidder is reportedly lining up an offer for Manchester United(NYSE: MANU), and investors are cheering the development. Shares of the iconic English sports club traded up 16% on Wednesday on hopes an offer is forthcoming.
So what
Manchester United is one of the most storied names in the English Premier League, and one of the few large soccer clubs that trades on U.S. public markets. The Glazer family, which owns the Tampa Bay Buccaneers National Football League franchise as well as a controlling interest in Manchester United, said last year it was exploring options for the soccer club.
Assets like Manchester United don't come on the market very often, and there has been some speculation that the club could sell for $5 billion to $6 billion. Sir Jim Ratcliffe, a Manchester United supporter who is CEO of British chemicals company INEOS, is rumored to interested, and if reports out of the U.K. on Wednesday are any indication, there could be a bidding war leading to a high valuation.
A Qatari investment group is preparing a bid for the club, according to a report in The Daily Mail. Sovereign wealth funds based in the Middle East have been behind some of the biggest deals in European sports in recent years, including the takeover of United's crosstown rival Manchester City Football Club and last year's purchase of Newcastle United F.C.
Now what
It isn't wise to chase rumors about potential acquisitions. Even if there is legitimate interest, it takes a lot of effort to get a deal across the finish line. A deal involving the Qataris could face opposition from some of the same human rights organizations that almost derailed a Saudi Arabian-led consortium's takeover of Newcastle United.
But the reports do suggest that the bull case for Manchester United -- that bidders will line up for this rare asset and the Glazers will be able to get a full price in an auction -- is holding up. For Manchester United fans and shareholders who have endured a lot of ups and downs in recent years, the reported interest is reason for excitement.
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