TOO LITTLE TOO LATE

Nils Pratley in the Guardian on the board’s letter to shareholders in which Sir Roy Gardner announced he will be resigning soon.

Manchester United's directors signed off yesterday with a condemnation of Malcolm Glazer's takeover of the Old Trafford club, warning of the danger of a "downward spiral" on and off the field.

The board also revealed that Glazer has so far failed to give any legally binding protections for fans on a range of basic concerns, not even a pledge not to interfere in team selection.

However the directors bowed to the inevitable and advised shareholders to accept the 300p-a-share offer now that Glazer has 76% ownership and full control. They argued there would be risks in becoming a minority investor in a Glazer-run private company with no obligation to pay dividends.

"Unless Manchester United shareholders have strong non-financial reasons for wishing to stay invested in the company, they should accept the offer," the board said in an 18-page circular to shareholders.

The directors themselves plan to sell. The largest investor is the non-executive Jim O'Neill, whose stake is worth £5m. The chief executive David Gill's shares are worth £512,000, but the takeover would trigger a £1.67m payment to him under a long-term incentive scheme.

Gill and the finance director Nick Humby have to decide whether to work for Glazer - the circular said the pair would hold discussions "regarding the management and ongoing operation of the football club". All the non-executives, including the chairman Sir Roy Gardner, will quit.

Gardner's hand was evident in a bitter tirade against Glazer's "aggressive" business plan and use of heavy borrowings. The circular states: "The board has considered it appropriate to operate the business since its flotation in 1991 on a largely debt-free basis principally to ensure that the company would not come under financial pressure in the event of poor playing performance . . .

"When a football club is under financial pressure, some of the key assets which it can sell are its players and, at a time of poor performance, such sales are likely to make playing performance worse. Too much leverage could therefore drive a downward spiral in both team and financial performance."

The board, even while in the process of rejecting Glazer's proposals last month, had promised to seek protections for the football club. It did not specify the areas at the time, but did so yesterday: future levels of debt, investment in new players, team selection, ownership of Old Trafford and ticket prices. They claim: "No such protections or assurances have been forthcoming."