Qatar buys Manchester United?
We are reading reports in Qatari media that Manchester United has been acquired by our preferred bidder, Sheikh Jassim – up 19% aftermarket. The reports are being printed in Qatari state media, which Jassim’s father owns a stake in. British media has started cautiously reporting on the news, too; as we write more news flow is coming through – it is a developing situation. We think it’s likely the reports are accurate and if so it suggests a +$31 per share acquisition price or a ~47% IRR on our MANU position in the US model portfolio. It’s been quite a journey with Manchester United – at first it looked like Jim Ratcliffe might prevail; when Qatar stepped into the fray the process became a kind of game of “who has the most money” – the best situation for an investor looking at arbitrage can be in– Manchester United is unlike so many assets because it’s a trophy asset (“what do you get a billionaire who has everything?. Cautiously chalking up a +47% gain but it’s not over “til the fat lady sings”. More arbitrage shenanigans over at Activision-Blizzard: the FTC is moving to block Microsoft’s acquisition of the gaming giant in Federal court – we think this is a fairly weak move from the Biden administration that comes on the back of the success of ATVI’s release of Diablo IV – +$666M in sales within a week – the fastest selling game in history. The Biden administration has talked a big game about blocking “big tech” but we have seen relatively little action from them: all bark, no bite. Our bigger concern with the merger is the UK’s antitrust commission, which has proven in the past that it has some bark behind its bite. As we have written before, ATVI is a good company with or without Microsoft – its blockbuster sales of Diablo prove just that. We see upside of +$85 without a merger and $95 with a merger.
NZ
The New Zealand market (NZX50, -0.6%) was down as investors remain cautious heading into a busy week of economic data. Infratil’s share offer for retail investors now open, eligible investors have until Tuesday 27th to apply. We encourage investors to participate.
Aus
Little newsflow but note that office tower valuations are on their way down – Dexus announced it had finalised the sale of a 26-storey A-grade office at 44 Market Street in the centre of Sydney – home to the ABS – to Hong Kong private equity player PAG for $393.1 million, a 17 per cent discount its December book value. This reads-through with KPG’s recent sale of the Aurora Centre at a 13.5% discount to its March ‘23 book value. How low does the office building sell-off go?