A tycoon tag fight at Old Trafford

Are they waiting for another Abramovich or just glory hunting? Abigail Townsend reports on stake-building fever at Man Utd

Between doping tests and the England football team's short-lived revolt, the name of Manchester United was popping up everywhere last week in the papers. News. Sport. Comment. Letters. Even the Leaders. Yet it was the business pages that the club dominated as shares changed hands and takeover speculation mounted to frenzied proportions.

The biggest movement was the purchase by Irish racing millionaires J P McManus and John Magnier, through investment vehicle Cubic Expression, of BSkyB's stake for £62m. Cubic doubled its holding to become Manchester United's biggest investor.

That was news enough. But then US tycoon Malcolm Glazer, the owner of the Tampa Bay Buccaneers American Football team, threw his hat into the ring. In the space of a week, he nearly tripled his investment to become the club's second-biggest shareholder with 8.937 per cent. Jon de Mol, the Dutch television tycoon behind Big Brother, was also involved and upped his stake to 4.105 per cent.

Manchester United attracts high-profile investors: other stakeholders include Celtic chairman Dermot Desmond, a friend of Mr McManus and Mr Magnier, and mining millionaire Harry Dobson. As well as BSkyB, those selling last week included hedge fund Lansdowne Partners, which reduced its stake from 5.17 to 3.72 per cent.

And then ... nothing.

Mr de Mol said publicly that he was not planning to bid, but Cubic and Mr Glazer maintained their silence and thoughts of a power wrangle turned instead into confusion.

The biggest question is why anyone would want to buy Manchester United in the first place. This is not a business that is badly run or missing opportunities. Indeed, as David Gorman, an analyst at broker WH Ireland, comments, Manchester United is a "cash-generating machine. They make over £2m in turnover every home game - it's just a phenomenal enterprise".

Recent full-year figures were better than expected, creating a potential argument that the shares are undervalued. But that is only an argument - and one that the house broker, Merrill Lynch, disagrees with. In recent notes, it has downgraded 2004 profits, voiced concern over the dividend policy and reduced its price target. Merrill also contributed to the takeover speculation, commenting that a predator could gear up the balance sheet "considerably". But even taking all that on board, the shares are by no means cheap at Friday's closing price of 234.25p, a 20 per cent increase since the start of this month.

Furthermore, Cubic and Mr Glazer initially came in when the stock was much cheaper and millionaires are not usually known for buying at the top end. As one institutional investor in the club puts it: "These are not the sort of people who just piss their money away."

What then, if anything, do Cubic and Mr Glazer know that others don't? One theory is that another Roman Abramovich - a wealthy tycoon searching for a hobby - is waiting in the wings. Yet Chelsea was just five days away from administration and had crippling debts, so Mr Abramovich's bid was a welcome relief. Manchester United is profitable and debt free, and even if an investor was prepared to spend at least £609m on the club (its market value at the close of business on Friday), what would he do then? The club has some of the world's finest players, it constantly performs well at home and abroad, and every commercial opportunity has been exploited.

Yet it does remain an option. Owning any sports club, but particularly a famous one, is not just about financial return. As the institutional investor says: "It's a trophy asset. Whereas somebody might buy an engineering company and work out the return on capital, football clubs, particularly those like Man U, are just not like that. After all, did Roman Abramovich buy Chelsea because he thought he was going to make money out of it?"

And regardless of any sports-mad oligarchs, that is the most likely reason for the current crop of shareholders to be jumping in with both feet. "It's a bit of a 'my cash pile is bigger than your cash pile' situation," says WH Ireland's Mr Gorman.

In other words, for all the newsprint and City gossip, it could boil down to something as simple as rivalry between investors.

It's a long way from Tampa Bay

Malcolm Glazer's last foray into sports could not have been any more different to his latest. In 1995 he agreed to buy the Tampa Bay Buccaneers, then a lowly American Football team. It has since gone on to glory.

His interest in Manchester United is harder to fathom. For a start, despite requests from the board, Mr Glazer (pictured) is not talking. The US is a market Manchester United would love to crack and it needs all the help it can get; Americans just don't get soccer. David Beckham, once the club's most lucrative export, has left and even he isn't big in America. The club toured the US in the summer and has made presentations to various investor groups, although Mr Glazer is not understood to be one of them. Manchester United has been targeting institutions, not individuals.

A friend of the Bush family, Mr Glazer bought a stake in a business founded by former president George Bush. Mr Glazer is also not the sort of man who buys entire companies, preferring - like his fellow investors from Ireland - to take strategic holdings. Additionally, the man who made his fortune in trailer parks is now aged 74 and may balk at taking on a business in another country in a sector where he is not an expert.

Yet, of all the current crop of newsworthy Manchester United shareholders, Mr Glazer is the most likely to bid; he may not be big in football, but neither was Roman Abramovich. He also has a reputation as a corporate raider and has pursued various high-profile companies in his time, including Formica and Harley-Davidson.

But, before the welcome mat is laid down for another overseas sports enthusiast, it is worth bearing in mind that while he went after Formica and Harley-Davidson - and made a tidy packet in the process - he failed to gain full control. Some commentators speculated at the time on whether that was ever in the game plan after all.

In sport, he has been less willing to walk away, trying three times to buy into baseball and twice into American Football before securing Tampa Bay.

Either way, his interest has caused the most head-scratching. As David Gorman at WH Ireland says: "You can see the Irish and Dutch interest; they know about football. But the US is more of a stretch."

More cryptic than Cubic, Irish investors play defensive game

John Magnier and JP McManus must be giving the Manchester United board a headache. They become the club's biggest shareholders last week with a stake between them of 23.15 per cent. That has been built up gradually since July 2001, but the big push came when Cubic bought BSkyB's 9.99 per cent holding before purchasing another 1.75 per cent on the open market.

Some insiders believe it was Mr Glazer's initial purchase of shares nearly two weeks ago that prompted the two to act and shore up their own position. Others say it was simply because the price was now right for BSkyB to offload the stock.

It is understood that Cubic will not be using its stake to bid. Although tight-lipped on the latest round of buying and selling, the two tycoons have always maintained that Manchester United is just a long-term value holding. It would not be their style to bid; they prefer to own stakes rather than entire companies. David Gorman at broker WH Ireland says: "They want a sizeable stake and a sizeable say in affairs, but I don't think they want to take it over as I don't think they want the hassle."

And as David Pope, a leisure analyst at Williams de Broe, adds: "Given their lack of public image, it's unlikely they are going to want to become chairmen of a high- profile company like Manchester United. They are playing the media game - and they understand the value of content." That final point is indisputable: the two made their fortune in gambling, a sector where strong knowledge is vital. Mr Magnier is regarded as the most powerful figure in the bloodstock world due to his ownership of the Coolmore stud in Tipperary, while Mr McManus owns more than 100 racehorses.

What it does look like is a blocking move. And while you need 25 per cent to wield that power - could the buying spree not yet be over? - it certainly gives them a strong say should a bidder emerge. "They're in a beautiful position if someone does make an offer," says one source. "It's going to be very hard for someone to take that club without their approval."

Yet much remains speculation; they are not talking to the board or the City. Nor, it should be remembered, are they talking to Sir Alex Ferguson. The three are locked in a dispute about the ownership of Rock Of Gibraltar, one of the most successful racehorses of recent times. Once all firm friends, the relationship between the Irish millionaires and the Scottish manager has soured and Sir Alex is now threatening legal action. Now that puts the infamous flying boot incident into perspective - the company's biggest shareholder by some margin and the company's most important manager at loggerheads.