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Manchester United’s £24m four-year deal to sign the Dutch striker Robin Van Persie may have pleased the team’s fans, but on Thursday the English Premier League football club’s shares fell to their lowest price since listing in New York a week ago.
Van Persie was England’s top scorer last season while playing for Arsenal but some analysts questioned whether United had overpaid.
The 29-year-old Holland international has a long record of injuries and had one year left on his contract at Arsenal after which United could have picked him up without paying a transfer fee.
“This is clearly not a businesslike purchase – an injury-prone 29-year-old [when] forward players tend to peak around 24,” says Simon Kuper, football author and Financial Times columnist.
“Manchester United supporters don’t like [United’s owners] the Glazers, so it looks [as if] they have okayed a non-business acquisition which makes them look good to the fans.”
Shares traded below their $14 offer price on Thursday, falling more than 5 per cent to as low as $13.30 in early trading.
Investors had been warned in the prospectus for United’s share offering that this year’s net transfer spend could be around £50m, one of the highest outlays since the Florida-based Glazer family acquired the club in 2005 in a £790m leveraged buyout. That is predicted to drop to around £25m in subsequent years.
“Capex spend is a key component of investors’ models for the company,” said one person close to the share offering. However the person insisted investors were not looking to make judgments on individual deals.
“This is not an investment group that knows much about football. The management pitched the club to investors on the potential for television advertising revenue that comes with the brand, not about transfer decisions.”
Half of the proceeds from the New York initial public offering are to be used to pay down the club’s debt, last reported at £423m.
While the purchase represents a coup over the club’s London rivals Arsenal, it also represents a break from United’s tradition of buying younger players on whom they can recoup their investment if they decide to sell later on.
“It’s a gamble,” says Andy Green, a prominent blogger on United’s finances. “I think it’s interesting that there’s no resale value and I think it shows the Glazers have been under-investing in players and this is their response.”
Many Arsenal supporters are bemused. Why sell your best player and top scorer last season to your Premier League rivals?
Arsenal’s second-biggest shareholder had already made that case. In July, Alisher Usmanov, the Russian billionaire steel magnate who owns almost 30 per cent of Arsenal, attacked the club’s management after Van Persie decided not to renew his contract – widely interpreted as an implicit transfer request.
But Arsenal are not alone in losing top talent to richer peers. The loss of Van Persie comes on the same day that Luka Modric, playmaker at Arsenal’s local north London rivals Tottenham Hotspur, appeared set to complete a £27.5m move to Real Madrid.