What happened
A Qatari billionaire has reportedly won the auction for English Premier League club Manchester United (MANU 0.06%). The club's common shares are soaring as a result, up 10% on Tuesday morning.
So what
Manchester United is perhaps one of the best-known sports brands globally, and it has an unusual ownership structure that allows supporters to control a small sliver. The team is owned by the Glazer family, but some of its shares trade on the New York Stock Exchange.
Last fall, the Glazers hired bankers to explore strategic alternatives for the club. In recent months, the focus has been on two potential bidders, with British investor Jim Ratcliffe reportedly interested in buying a controlling stake, and Middle Eastern investors interested in buying out all shareholders.
On Tuesday, Qatar's Al-Watan newspaper reported that Sheikh Jassim, son of the country's former prime minister, will be announced as the preferred bidder. Jassim is viewed as more likely than Radcliffe to acquire all shares, meaning common holders are likely to get a payout should the deal close.
Now what
This auction has had a number of twists and turns, and even if Jassim is confirmed as the preferred bidder, there are still a lot of hurdles, including regulatory approval, before the deal closes. Given that Manchester United shares are up more than 20% in recent days, investors should be cautious about chasing this rally.
But for long-term holders, it appears the auction might lead to the best possible outcome for individuals looking to make money on their investment. Manchester United's days as a publicly listed sports club might soon be coming to a close.
