LONDON (AFP) - The board of English football giants Manchester United announced it had ended talks with US sports tycoon Malcolm Glazer, saying his takeover proposal risked leaving the club mired in debt.
Glazer and his family have built up a stake of 28.1 percent in Manchester United, the world's richest football club, but have not yet put a formal offer on the table.
The club said it would reject any proposal in its current form from the American multi-millionaire, expressing concern about the level of leverage, or debt, that would be used to fund the bid.
"The financial returns in any football club are very closely correlated with performance on the pitch," the group said in a statement.
"Given its views on the importance of an appropriate capital structure, the board has decided to inform all shareholders that it would regard an offer which it believes to be overly leveraged as not being in the best interests of the company.
"Accordingly the board has determined that it would not support any offer underpinned by the structure which has been outlined in relation to the Glazer Family's potential offer."
United shares fell 3.08 percent to 275 pence in early deals, while the London FTSE 100 share index was down 1.32 percent at 4554.70 points, mainly because of record high oil prices.
Glazer, owner of NFL franchise Tampa Bay Buccaneers, is the second-largest shareholder in United, just behind the club's biggest shareholders, the Irish racing tycoons John Magnier and JP McManus who together own 28.9 percent.
All three stakeholders are just short of the 29.9-percent threshold above which an offer to buy out the club would have to be made under British takeover rules.
Magnier and McManus have not bought any shares in Manchester United since February and are understood not to be planning a bid themselves.
Meanwhile Nomura, the Japanese investment bank, has confirmed it is advising stockbroker Seymour Pierce, whose chairman Keith Harris is a long-time Man United fan, on ways to block a possible takeover bid by Glazer.
"Nomura confirms its Asset Finance Group is in discussions with Seymour Pierce Ltd about providing finance to assist them and the supporters with a view to developing a strategy that will provide a long-term future for Manchester United that is in the best interests of the club," Nomura said in a press release issued last Friday.
News of Glazer's interest in United has been fiercely opposed by United supporters, believing like the club that the tycoon has insufficient funds.
They fear he would have to mortgage the club's future to raise the required stake, and hike ticket prices.
On the pitch, United won a massive boost Sunday by defeating arch rivals Arsenal 2-0 in the English Premiership, ending the Gunners' record-breaking run of 49 unbeaten games in the country's top division.
10/25/2004 - 11:23 GMT - AFP