Talks about a possible bid for Manchester United plc collapsed after its biggest shareholders, Mr John Magnier and Mr JP McManus, walked away from the negotiations early yesterday.
The Irish duo, who own 28.89 per cent of the company through their offshore vehicle Cubic Expression, had been in preliminary discussions with US business man and fellow shareholder Mr Malcolm Glazer.
He was preparing a bid valuing the company at £3 (€4.34) a share or a total of €1.14 billion. However, without Cubic Expression's support, Mr Glazer cannot mount a successful bid for Manchester United.
According to City of London sources, Mr Magnier and Mr McManus informed Mr Glazer's advisers, US investment bank JP Morgan, that they were no longer interested in continuing with the talks on the basis of the proposal that he outlined to them.
The company's shares slumped by 9.5p or 3.5 per cent to close at £2.64 in London on the back of the news.
Earlier this week, the shares traded at £2.80, their highest level this year, as investors bought in the expectation that a deal would be done.
News that the talks collapsed emerged yesterday afternoon. Some reports indicated that it was Mr Glazer that was set to exit the negotiations. However, a source close to him said that the situation was "fluid and could change at any time".
The company that owns the world's richest soccer club has been at the centre of speculation since the beginning of last week when its board announced that it had received a preliminary approach from an un-named party.
While the board has not made any comment beyond that statement, Mr Glazer emerged as the potential bidder. He already owns 19.17 per cent of the club.
He has been building up this stake since March 2003, when he purchased an initial 2.9 per cent of the company.
Mr Glazer is based in Florida and owns American football team the Tampa Bay Buccaneers. He originally made his money developing mobile home parks and other property interests. He is said to be worth in the region of €900 million.
However, most of his assets are tied up and it was assumed that he would have borrowed the cash needed to fund a buyout of Manchester United shares.
Fans feared that he would have repaid this by increasing ticket prices and by cutting back on spending on players, who ultimately hold the key to Manchester's on-field and commercial success.
Last night, Mr Seán Bones, vice-chairman of Shareholders' United, a group of fans with shares in the company, welcomed the news that Cubic Expression had walked away from the talks.
"Both John Magnier and JP McManus are wealthy and affluent people and tonight, because of what's happened, they are popular as well," he said.
Mr Bones's organisation was one of a number that had been working on galvanising opposition to Mr Glazer.
The company published its annual report yesterday but did not comment on the talks.
