Shares of English Premier League powerhouse Manchester United (NYSE:MANU) continue to seesaw amid speculation over its potential takeover. Last week, MANU shares rose over 5% on reports that the Glazer family, the current owners of the club, may favor a bid from billionaire Jim Ratcliffe that could value the club at nearly $6.1 billion.
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Subsequently, disagreements over valuation led to Sheikh Jassim Bin Hamad al-Thani, the Chairman of Qatar Islamic Bank, withdrawing from the bidding process. This brings a deal with Ratcliffe closer to the finish line for MANU. According to the Wall Street Journal, Ratcliffe could pick up a 25% or more stake in the soccer club’s nonvoting shares alongside an equal voting stake from the Glazer family.
Will MANU Stock Go Up?
While Ratcliffe would pick up the stake at a premium, MANU shareholders can only exit their holdings partially. The limited ability of investors to benefit from a deal seems to be weighing on the stock today, which is down nearly 10.5% in the pre-market session already.
Today’s price drop comes on top of a nearly 12.2% slide in MANU shares so far this year. The stock is currently trading at a price-to-earnings multiple of -27.3, indicating the club’s new ownership may have its task cut out to reach profitability, and the shares may face a bumpy ride before going up anytime soon.
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