Man Utd boss threat to US bank
MANCHESTER United chairman Sir Roy Gardner is set to cut all his business links with JP Morgan after the US bank acted as main financier in the £790m takeover while its UK venture was the football club's corporate broker.
JP Morgan is expected to earn a hefty fee for its work on the £540m debt package needed to fund American tycoon Malcolm Glazer's takeover while also billing for its broking advice via its separate UK investment banking joint venture, JP Morgan Cazenove.
The US bank is thought to have assured companies it would never work on a hostile bid against a Cazenove client.
Gardner, chief executive of power colossus Centrica, is understood to believe that Glazer's approach was hostile triggering his anger with the bank, say newspaper reports. But sources close to JP Morgan Cazenove insist Glazer's bid was not rejected by the board, and that debt arrangers and brokers work in separate entities for the US bank.
Glazer's takeover involves issuing £275m of so-called preferred securities thought to be paying 10% interest per year. These have been sold to US hedge funds Citadel, Och-Ziff Capital Management and Perry Capital.
A growing trend among big City banks is to try and advise one company in a deal while providing finance for the other. Citigroup advised BT on the £2.3bn sale of its UK property arm in 2001 to Land Securities' joint venture Telereal. It then worked as lead bookrunner on a £1.8bn securitisation for Telereal that partly financed the purchase.
