GLAZER FALSE DAWN?

Here it goes:

For 20 months, Malcolm Glazer, the US sports billionaire, has been stalking Manchester United. But now the super-rich owner of the Tampa Bay Buccaneers is preparing to abandon his cherished dream to buy the biggest club in football.

The Telegraph has learnt that Glazer has told close associates that there is a "50-50" chance that he will walk away from pursuing the club. Not only has Glazer lost his financial backers and his public relations advisers, but there are suggestions that his finances have been dangerously stretched.

Close associates say that Glazer is now prepared to sell his 28.1 per cent stake in Man Utd as long as he can recoup the estimated £200m he has spent amassing his stake.

So why, after a protracted and increasingly bitter battle, is Glazer now on the verge of quitting?

Glazer's position was weakened two weeks ago when he took the extraordinary step of declaring open warfare on the Manchester United board and blocked the re-election of three directors at the company's annual meeting.

The aggressive tactics led to the sudden resignation of JP Morgan and Brunswick as - respectively - his investment bank and major financial backer and public relations adviser. JP Morgan had agreed to bankroll a complete takeover of the club pledging £500m to help Glazer achieve his dream deal. The loss of the bank - after a heated phone call between the bank and Glazer's sons Joel and Avi - was a devastating blow.

Since then, the Glazer camp in Florida has been silent, indicating for many bankers and analysts that the billionaire has been unable to find a way of proceeding with his takeover ambitions.

Glazer's main problem is that he appears to be unable to secure alternative financial backers. Earlier this month, Deutsche Bank was reported to be ready to bankroll a Glazer bid, but the German bank quickly scotched the reports, though not before Man Utd supporters had bombarded its offices with angry phone calls.

Bankers believe that no bank is prepared to support a hostile takeover bid, given Man Utd's heady share price, which values the company at £736m, and the verment opposition from fans.

What is clear is that Glazer needs big money to proceed and has big debts to cope with. Commerzbank, the German bank, initially agreed to lend him an estimated $100m to build his stake. Glazer is also thought to have taken on other debts, which have been secured against the shares, but could be repaid by refinancing Manchester United once a successful bid had been completed.

While the terms of plan remain sketchy, the Manchester United board terminated discussions with Glazer last month over concerns that his highly leveraged bid would have saddled the company with massively loans of between £300m and £400m.

Bankers say Glazer's dilemma is that while he is struggling to gain finance, walking away could cause Man Utd's shares to dive and leave him with huge paper losses totalling millions of pounds.

One solution would be for Glazer to find a single buyer for his stake. However, bankers believe no institution is prepared to make such a huge investment given the takeover premium already attached to the shares which currently trade at 281p. Fair value for Man Utd is closer to 200p per share, analysts believe.

Unfortunately for Glazer the option of just sitting and doing nothing is not attractive - the difference between the dividend yield of his Man Utd stake and the interest repayments on his borrowings could still amount to millions of dollars.

One banker said yesterday: "Glazer is not going to get Man Utd. But he can't say that without triggering a fall in the club's share price. If that happens he is sitting on an asset that is only going to fall in value the longer he does nothing."

Anyway, even if Glazer does pull a rabbit out of the hat and find another financial backer he still faces the tricky problem of convincing JP McManus and John Magnier, the Irish multi-millionaires, to sell him their 28.9 per cent stake.

The Irish duo, who hold the stake through their investment vehicle Cubic Expression, have already turned down an informal offer of 300p a share because it was conditional on Glazer winning the support of 75 per cent of Man Utd's shares - the threshold needed to gain control of the club.

Cubic are "sitting on their hands" according to one banker, though some believe an unconditional offer of 310p per share could persuade McManus and Magnier to sell.

If Glazer withdraws, the saga over who owns Man Utd may not be over. Keith Harris, the chairman of Seymour Pierce, the broker, is still working on a plan with Nomura, the Japanese bank, to financially restructure Man Utd to allow fans a greater say in how it is run. There also remains the possibility that a billionaire with deeper pockets than Glazer could yet emerge from nowhere as Roman Abramovich did when he bought Chelsea.

Once again the support of Magnier and McManus, who claim they are long-term investors, would be crucial. As football pundits are fond of saying, this one could be heading for extra time.

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