The Red Knights announce they are not planning an imminent takeover of Manchester United football club. There is something strange about the announcement and about the Red Knights
Many takeovers take place under conditions of secrecy. There are considerable advantages in such clandestine behaviour. It retains any opportunistic benefits in the potential deal over other investment groups, for example. It avoids unwelcome attention from the target organization towards the threat.
This is what puzzles me over the actions of the so-called Red Knights. Their strategy seems based on gaining as much publicity as possible for their intentions to take over the debts and ownership of the football club. This transparency is not necessarily wrong. Yet, the more typical-goings on in a takeover are suited to insider trading which has sometimes gone on during a financial corporate bid.
The Red Knights are not an established takeover organization. They appear to be an entrepreneurial and virtual set-up whose individual members present themselves as having widespread knowhow and contacts in big players in the financial markets.
A story has developed around the Knights. The BBC version seems the capture the publically-available information:
A group informally known as the Red Knights is plotting to oust the Glazers with a billion-pound takeover bid and they have recruited the Japanese investment bank Nomura to help them put together a deal.
Who is behind the consortium?
The group, who first met in March, is made up of City bankers and lawyers. Among them are Jim O’Neill, a former HSBC investment bank chief executive and chief economist at Goldman Sachs; Seymour Pierce stockbroker Keith Harris; Paul Marshall, a partner at the hedge fund Marshall Wace; Richard Hytner of advertising agency Saatchi and Saatchi and lawyer Mark Rawlinson, a partner in Freshfields’ corporate practice, who advised United during the Glazer takeover negotiations.
Does the group have the fans’ interests at heart?
Self-professed United fan Harris, the man brokering the potential takeover, claims the group want “to do something for the good of Manchester United and the good of football.”
On Red Knights and the Age of Chivalry
The Red Knights, whoever they are, have won the commitment of the Manchester United Supporters Trust (MUST). In turn, MUST has created a wellspring of trust as an organization dedicated to the interests of the ’true’ fans of Manchester United. I find their motives relatively clear-cut, and suspect that they may well have influenced the decision at the club to freeze prices of season tickets next year. On the other hand, the fans are one important aspect of the club’s business environment, but not the only interest. There may be genuine differences of opinion, for example, on how revenues are managed, what proportion towards expensive new players, for example, how much to extract from those loyal fans.
Furthermore, I am suspicious of self-proclaimed heroes rushing to the aid of damsels in distress. As Monty Python has helped us realise, the age of chivalry has passed. I just hope the legacy of the legend of the Red Knights will be more than another layer of irony in renditions of an Old Trafford favourite “Always Look On the Bright Side of Life” [… de dum, de dum, de dum…]