WATKINS OUT?

THE board of Manchester United could be torn apart today if Malcolm Glazer, the American industrialist who is trying to buy the club, votes against the re-election of key directors at the company's annual meeting.

The 76-year-old is said to be angry at the board's rejection of a potential £800
million bid and has threatened to use his 28.1 per cent shareholding to block the reappointment of Andy Anson, the commercial director, Philip Yea, a non-
executive director, and Maurice Watkins, the club's lawyer and a principal figure at Old Trafford for the past 20 years.

As the second-largest shareholder, Glazer has the power to change the
corporate face of the club he covets.

Glazer would be indirectly helped in his quest to punish the board for their snub
of his approach by the neutrality of John Magnier and J. P. McManus, the
Irishmen who hold a collective 28.89 per cent stake through Cubic Expression,
their investment vehicle. The pair have historically abstained from voting at the
annual meeting and are expected to maintain that stance.

The position of Watkins will be further undermined by the decision of
Shareholders United, the influential fans group, to abstain from voting on his re-
election.

The reason for their abstention is his decision earlier this year to sell one million United shares. They were subsequently bought on the open market by Glazer,
helping the American to build his stake and netting Watkins £2.5 million.

In October, Watkins's car and house in Cheshire were vandalised by radical
elements of United's fan base. "People feel angry about the sale of his shares,"
Nick Towle, the Shareholders United chairman, said. "We do not want to vote
against him because we do not want to appear divisive, but we are registering
our members' concerns."

Shareholders United, whose share scheme accounts for about 1.5 per cent of the equity, will back the re-election of Yea and Anson.

With a potential bloc of 30.5 per cent abstaining and Glazer's 28.1 per cent going against Watkins, the danger of his removal from the board is great. The United board would have to rally the remaining 41 per cent of shareholders to their cause, made more difficult by the fact that few institutional investors bother to vote on such standard issues.

The board is likely to come under pressure from fans to spell out a long-term
solution to the uncertainty over ownership of the club. Shareholders United has
secured the backing of the All Party Football Group, a cross-party parliamentary group that has agreed to put pressure on the Government to investigate whether Glazer is a "fit and proper person" to be taking over the club.

The Securities and Exchange Commission, the US stock market regulator, is
investigating parts of Glazer's business empire for financial irregularities.
Shareholders United would like the Department of Trade and Industry to do the
same.

Glazer's initial attempt to open discussions with Magnier and McManus about a
300p-a-share offer for their stake faltered last month. The American is expected to sweeten his proposal, although no discussions are going on. He may still be thwarted by the Irishmen, who have kept their counsel over their intentions for United. Publicly, they have maintained that they are long-term strategic investors.