IT WOULDN'T HAVE WORKED ANYWAY

SU hope that the news will deter JP Morgan from backing Glazer and give the
MUplc Board sufficient grounds for rejecting any approach.

SU has taken advice from a firm of leading City analysts, who have volunteered their services for free for the duration of the takeover battle, as to the most likely shape of such an offer by Glazer.

The following probable key elements have been identified by our analysts:

* At a price of 300p per share and assuming little incremental equity is provided as part of the acquisition funding, leverage could be exceptionally high - at up to 10 times cash operating profit

If Cubic holds out for 310p, which many expect, the leverage will be even higher and the bid model even less sustainable. Turning a debt-free company into an effectively debt-laden one, with payback over a possible 10-year period, just as football enters an uncertain period as regards TV revenues and a possible peaking of popularity, would throw the future of the club into doubt (cf Leeds United). SU believes that CEO David Gill, in his public statements (see:
www.mufcnotforsale.com), does not appear to have ruled out rejecting any bid
which would leave the company worse off in the future, even a fully-priced one.

* On this basis, Glazer would require a rapid uplift in cash flows of possibly over 100% in order to be able to successfully service the debt

It is unclear how he would achieve this, particularly as the current United
management team is recognised as being both strong and established in
managing the club. And if Glazer sticks to an unlikely promise of an initial ticket
price freeze for the match-going fan, the burden of cash flow uplift in the short
term falls on the sponsorship/partnership deals. SU envisages attempted
renegotiation of existing deals (e.g. Vodafone and Nike) although Glazer cannot
have seen the terms of the contracts with these companies and the possible
penalties for early termination/renegotiation. In addition, an increase in the
number of sponsors/partners (proceeds of which go straight to the bottom line)
could not be guaranteed to work because of the risks of brand dilution and
consequent reduced revenues from these new sources - the current Board has
clearly learnt a lesson here and is in the process of reducing the number of
partners ('quality not quantity') for this very reason. Sponsorship is increasingly a two-way street in UK sport and it is not clear that Glazer and his team have fullyunderstood this. Should Nike be replaced, there are very few candidates
(perhaps only one: Adidas), and they would be unlikely to pay more, given they
would be facing little competition. Distribution channels would be severely
disrupted, given that Manchester United Merchandising Limited is in the hands of Nike. Another obvious source of major sponsorship would be the stadium
(though this is seen as viable only with new stadia) - but given that Old Trafford is already very well branded ('Theatre of Dreams'), it is unlikely that this would
prove a sufficiently attractive prospect for a potential sponsor to generate the
required income, not to mention the resentment amongst fans at any tampering with the OT institution (bombed during World War II).

* In addition, key revenue streams are tied down for a period of time or are
outside United's control, so cash flows will need to come from new and unproven revenue sources - shades of 'dot com' revenue forecasts based on the number of United supporters globally

Where is the 'golden egg'? What makes Glazer think that he knows better how to profitably run an English football club than the present Board? Glazer has very limited experience of building and growing sports franchises outside the US and outside of a geographically 'protected' market. China and the US are difficult markets to 'mine' in the short term, and if the bid model assumes substantially higher revenues from the upside in the Nike deal through expanding sales to United's growing customer database, a widespread customer boycott by disaffected UK fans could severely reduce that upside (the UK is still the largest merchandising market for United).

And lastly, the Glazer experience of rescuing a failing NFL franchise is in no way
comparable to buying an English football club with a global brand which is
already successful on and off the pitch.

* United has also stated that they expect a weaker year in 2005 in any event,
with revenues down by up to £12-15mm as a result of reduced media revenues
from the new FAPL contract and the impact of their 3rd placed finish last year
and UEFA Champions League revenues this year.

SU suspects that the Glazer bid model will be based on some very aggressive
assumptions and projections and may leave a highly-geared company vulnerable to any short- or long-term downswings resulting from market factors or performances on the pitch. It is possible that Glazer will be over-borrowed and, without other asset sales, will be in no position to inject further equity into United in such circumstances.

THE FATAL FLAW AND THE SILVER BULLET:

* In order to load up United with debt to pay for the acquisition, Glazer needs to acquire a minimum 75% and ideally 100% of the equity to take the company
private as a fully-owned entity. Under the Companies Act, a plc cannot give
financial assistance in the acquisition of its shares (except in very limited
circumstances, almost certainly not applicable here), while private companies
can, if they go through certain procedures (ie unless Glazer can take the
company private, company assets cannot be used to pay off the debt incurred by him to buy MU).

SU is well on the way to achieving its first target of owning or directly controlling over 5% of the United equity. This means two things:

(1) If Cubic agrees to sell its stake to Glazer, a 5.2% SU/fans stake would be
sufficient to block any compulsory buyout of that stake. [Under Companies Act
rules, the 90% compulsory buyout rule actually refers to 90% of the shares which are the subject of the offer (i.e. not including Glazer's shares and those he has contracted to acquire such as Cubic's, which would total around 48%). 10% of the remaining 52% of United's equity is sufficient to block a minority buyout.]

(2) More importantly, shareholders with 5% of the equity combined can under the Companies Act apply to a court to prevent a company from being taken private. If SU achieve its target of over 100,000 fans holding shares when Glazer wishes to take United private, it would be a brave judge who disenfranchised this number of shareholders & emotional stakeholders (including those in SU's new Supporters' Trust whose objects include an obligation on the Trust to hold such shares irrevocably). Even if the judge were to rule against the minority shareholders, he would likely order the bidder to buy the shares, presumably at the bid price so minority shareholders have nothing to lose in taking such action, other than a costs liability.

(3) The significance of Glazer losing a court case brought by minority
shareholders to prevent the company being taken private could be huge. He
would find it difficult to implement any plans for United to give financial
assistance in the acquisition of his shares, through borrowings, guarantees,
asset securitisation or otherwise.

SU vice-chair Oliver Houston said: 'The banks are on to a loser if they back
Glazer. Fans must realise that every share counts and that, united, we can save our club.'