Glazer finds open books and closed doors at United

Manchester United last night allowed Malcolm Glazer to take a small step forward with his takeover bid, by granting him access to the club's books, but then effectively took his feet from under him by saying they will not provide the potentially deal-sealing official recommendation he requires.

As ever with Glazer's stalking of United, there will be more twists and turns before the 76-year-old American, nickname "The Leprechaun" for his looks, either takes control at Old Trafford or is finally sent packing with a flea in his pointed ear. But if his plans for ownership of the club are not quite dead in the water, they are at least flailing and in need of substantial outside assistance to stay afloat.

Pivotal decisions that could make or break a deal are in the hands of third parties, namely the investment bankers, JP Morgan, and United's major shareholders, John Magnier and J P McManus.

Precedent strongly suggests that the Irish racing tycoons, who own 29 per cent of United through their Cubic Expression firm and who are swayed by no one's interests but their own, will reject the 300p per share offer that Glazer is preparing to table. When Glazer approached them with a 300p per share offer last year, they sent him away. It is understood that they might react in the same way to the same offer again.

A statement from Cubic last night gave Glazer no grounds for optimism. "Today's announcement [about access to the books] changes nothing in relation to Cubic's position as long-term investors in Manchester United," a spokesman said.

Without the support of Magnier and McManus, Glazer's hopes fall firmly into the drowning, not waving, category. Even if the Irishmen are minded to take Glazer's money, Glazer could yet find his dream scuppered by JP Morgan.

The bankers have agreed to provide ?300m in funding to Glazer as part of an ?800m buy-out but have made it clear in the past they would not back a hostile takeover. If the United board fails to recommend any formal offer that materialises, Glazer's approach effectively becomes hostile. If JP Morgan stays true to not backing a hostile bid, Glazer's finance disappears and his bid is finished.

One unknown factor that confuses matters is how JP Morgan would react if the board refuses to recommend a Glazer bid but also chooses not to reject it formally. The board could adopt a "third way" route, of neutrality, or "cop out" as it would likely be known among United fans.

This would leave JP Morgan with a momentous ? and potentially risky ? decision on whether or not to back a non-recommended plan that includes financial dangers.

In a statement yesterday, the board, led by the chairman Sir Roy Gardner and chief executive David Gill, expressed serious reservations about the structure of Glazer's proposed bid. It is understood that Glazer, whose 28 per cent stake in United is worth around ?250m, is proposing to borrow ?300m from JP Morgan and raise ?250m from new "preferred stock" shares to buy the rest.

"The board believes that the nature and return requirements of this capital structure will put pressure on the business of Manchester United, particularly if Glazer's business plan was not met," United said. "The board continues to believe that Glazer's business plan assumptions are aggressive and that the direct and indirect financial strain on the business could be damaging."

In other words, Glazer's bid, as configured at the moment, might put the future of the club, which is profitable and debt-free, at risk.

While accepting that 300p per share seems a fair price for shareholders, the board added: "If the current proposal were to develop into an offer, the board considers that it is unlikely to be able to recommend the offer as being in the best interests of Manchester United, notwithstanding the fairness of the price."

So what next? In all probability, Glazer will go away, slightly rejig his terms, return with a formal bid and hope against hope the board offers its formal recommendation after all.

That backing is unlikely to happen, but nor might there be outright rejection. JP Morgan will then make its call: to back or not to back Glazer, that is the question. The bankers might be swayed towards risk simply by the smell of some ?30m in fees.

Glazer would then outline his case to shareholders, including Cubic, and all shareholders would inform the club whether they accept his offer. The Irishmen's decision would be vital. Glazer needs 75 per cent of United to delist the club and take it private, and 90 per cent to gain a compulsory purchase order on the rest. Fan shareholders will obstruct him every inch of the way, even if everything else falls improbably into place.