What happened
The long-anticipated sale of Manchester United(NYSE: MANU) has reportedly been put on hold, and investors are bracing for defeat. Shares of the legendary U.K. soccer club fell as much as 10% on Tuesday on concerns over whether a deal can get over the line.
So what
Manchester United is one of the world's most storied sports brands and one of the only ones that is publicly traded. The team is majority owned by the Glazer family, but some of its shares trade on the New York Stock Exchange.
Last fall, the Glazers hired bankers to explore options, and in June the stock soared on reports that the club was nearing a deal to sell to Qatar's Sheikh Jassim bin Hamad Al Thani. The rumored deal, which would mean a cash out for all shareholders, valued the club at about $6 billion.
But we haven't heard much since. On Tuesday, iNews columnist Mark Douglas reported that the takeover process "has been effectively paused" with bidders given little direction about what comes next. There is some speculation, according to Douglas, that the Glazers are disappointed with the proposed valuation or might want to wait and see how new international television deals could boost the value of the club.
Now what
The Glazers have been the target of a lot of animosity from Manchester United supporters in recent years, and supporters who are also shareholders are likely to assume the worst when they see reports like that. However, it is important to note that this is just one report and even if correct could just be a negotiating tactic. What we don't know is much more than what we do know.
That said, with Manchester United shares currently more than 80% higher than where they were last fall before the reports surfaced, it is hard to blame investors for taking those gains and moving on instead of continuing to ride out the drama. Like any classic sporting event, the drama surrounding the Manchester United sale is likely to continue until the very end.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
