Glazer may refloat United in three years

Malcolm Glazer could return Manchester United to the stock market via a flotation within three years, according to City banking sources. The American, who yesterday achieved the 75% level of ownership he needs to take United private, is understood already to have pencilled in a refinancing of the deal within the next two or three years.

His options include a partial flotation, in which his stake in the club would be diluted and fans might get a chance to buy shares, and a fund-raising to bring in new investors. Glazer's aim would be to pay off, or pay down, the £275m he raised by issuing preference shares to three New York-based hedge funds.

But there were reports yesterday that Glazer's debt could spiral to £894m within five years of the deal being compeleted with rolling interest of up to 18% a year on these hedge fund loans.

These funds provided the pivotal element in Glazer's funding of his £790m pur chase. The preference shares carry an effective interest rate of 12% to 13%, although the payments can be deferred.

But, as the most expensive part of his funding, Glazer is likely to try to pay off the New York funds as quickly as possible. To maximise his profit and attract new investors, he will need to demonstrate that United's operating profits can be lifted above the £58.3m the club achieved last year.

It appears his priority is to increase revenues from sponsorship, merchandising and match-day income. The rises in ticket prices already announced by United will go ahead. Glazer's precise level of ownership is now 75.7%. He is likely to order his stockbrokers to stop buying shares in the market and instead wait to see how many remaining investors accept his 300p-a-share terms.

Manchester United attempted to lighten the mood at Old Trafford yesterday when the club announced that Ryan Giggs and Tim Howard had both signed two-year contract extensions.