Drop in United's profits will encourage Glazer bid

Malcolm Glazer's attempt to buy Manchester United will be bolstered today when the club reveal that their half-time profits to Jan 31, 2005, are much lower than a year ago.

United are expected to show pre-tax profits of about £13 million, a drop of more than 50 per cent from the £26.8 million they announced in January 2004. Their overall turnover is expected to fall to about £87 million from £92.4 million last year.

The reasons for the decline are a fall in income, reduced revenue from the Champions League and an increasing wage bill.

United will claim this comes as no surprise. When they announced their full year results for 2004 in September, chairman Roy Gardner warned profits would fall.

However, the decline is greater than City analysts predicted in January and this will encourage Glazer and his advisers, who can argue that their offer of 300p per share is much higher than the present share price of 272p, showing how attractive it is to shareholders.

The club's board have conceded that the price the American media tycoon is prepared to offer is fair, but they have doubts about his financial plan and the debt he may burden the club with should he succeed. These fears are shared by fans opposed to the bid. Organised by Shareholders United, they are trying to get a 25 per cent stake to thwart Glazer.

It remains a mystery when Glazer will make his move. His advisers have completed their examination of the books but are yet to hold formal talks with the board - the first step before a formal offer to all shareholders.

This is partly because Joel Glazer, the son of Malcolm and frontman of the bid, is recovering from appendicitis. They also need to convince the Irish pair of John Magnier and JP McManus - the largest shareholders with 28.9 per cent, slightly more than the 28.1 per cent Glazer owns. Their assent to any offer is crucial to Glazer's success.

To sweeten the bid, Glazer is likely to promise United manager Sir Alex Ferguson significant summer transfer funds.

Gardner has already warned that the purchase of Wayne Rooney, for a sum that could eventually reach £27 million, means Ferguson would have to sell several players in the summer to fund bids for a new goalkeeper and Lyons midfielder Michael Essien.