One view of Sir Jim Ratcliffe within the enterprise world is that he’s an opportunist, an astute dealer who likes to purchase belongings from distressed sellers at low-ball costs.
That characterisation – that he’s the chemical substances business’s equal of rag-trade king Sir Philip Green – is quite unfair.
Yes, Sir Jim is an exceptionally shrewd purchaser of belongings, however he has additionally proven himself to be a cautious long-term investor and affected person builder of companies.
But he didn’t get to turn out to be Britain’s richest man by overpaying for issues.
That is the context into which information that the Ineos proprietor has expressed an curiosity in shopping for Manchester United ought to be positioned.
According to a report on Bloomberg yesterday, the Glazer household – which owns a controlling stake in the OId Trafford membership – is contemplating promoting a minority stake.
A spokesman for Ineos subsequently made clear: “If the club are for sale, Jim is definitely a potential buyer.”
But United followers determined to see the again of the Glazers ought to not get their hopes up.
For a begin, the Glazers haven’t mentioned the membership is on the market, it has merely been reported that they wish to herald outdoors funding.
This is one thing, in fact, that the household has already achieved beforehand when, in 2012, it floated Manchester United on the New York Stock Exchange and bought a minority stake within the enterprise to outdoors traders.
The household now personal roughly 69% of the membership however retains management as a result of it owns the entire class B shares – which have 10 instances the voting energy of the publicly quoted A shares. It is in no way clear that the household are but ready to surrender full management.
Secondly, if newspaper reviews are to be believed, the Glazers put a quite larger valuation on United than the market does.
The membership’s inventory market valuation on the closing value on Wednesday night was £1.85bn ($2.23bn).
That is considerably decrease than the £5bn ($6bn) valuation that the Glazers are mentioned to position on it.
It is very unlikely that Sir Jim, who has by no means knowingly overpaid for something in his profession, could be ready to pay something near that.
All that mentioned there’s something irresistible in regards to the concept of Sir Jim, a boyhood fan who was born simply up the street in Failsworth, taking possession at Old Trafford.
Sir Jim – who grew up in a council home and whose first diploma was in chemical engineering at Birmingham University – has an inspiring story.
What makes him such an interesting character is that not solely is he a chemical engineer, however he additionally understands monetary engineering, having certified as a administration accountant after starting his profession at Esso Petroleum and the chemical substances, textiles and fibres firm Courtaulds.
Still in his 30s, he joined Advent, the personal fairness agency, in 1989.
From there, he co-founded Inspec, a enterprise shaped from BP’s speciality chemical substances division, which had been purchased for £40m in 1992.
Less than two years later, he had floated the enterprise on the London Stock Exchange with a valuation of £136m, earlier than most of it was purchased by rival Laporte for £611m in 1998.
That 12 months noticed him purchase Inspec’s petrochemicals enterprise – the operation that was to turn out to be Ineos.
He advised the Financial Times in 2006: “Starting Ineos was a natural progression based on my experience.
“My time at Advent was spent advising shoppers on the expansion and growth of companies within the chemical substances sector.
“An opportunity presented itself with Inspec and after five years advising companies, I thought it was time to put the advice into practice.”
Sir Jim quickly constructed Ineos into one of many UK’s greatest chemical substances companies via a string of acquisitions.
Still a largely unknown enterprise outdoors the chemical substances business, it first attracted wider curiosity when in 1999 it purchased ICI’s acrylics enterprise – best-known for its Perspex product – for £505m.
More individuals started to concentrate when the next 12 months, it took three extra companies off ICI’s arms, together with a large plant in Runcorn, Cheshire, chargeable for producing the overwhelming majority of the UK’s chlorine and caustic soda.
But the transaction that actually put it on the map got here in 2005, when it paid £5bn for the majority of BP’s petrochemicals enterprise, at a stroke changing into the world’s fourth largest unbiased participant within the discipline.
With it got here the corporate’s world-famous 80-year-old petrochemicals plant at Grangemouth in Scotland.
What made the corporate’s progress all of the extra outstanding, was that it was shopping for belongings in competitors with personal fairness firms.
In an interview with Chemical Week, in 2001, Sir Jim defined: “We’ve found greater receptiveness from sellers because we’re not a private equity capital company.
“Chemical firms are extra snug coping with us than with accountants from the personal fairness capital sector, who’re a distinct breed of individuals.”
In all, Sir Jim spent getting on for £5.8bn ($7bn) between 1998 and 2008 buying 22 companies, fuelled by debt.
Ineos was constructed on a mountain of the stuff – and this put it in a precarious place when the worldwide monetary disaster struck in 2008.
The firm’s bankers sought to grab management of the enterprise and Sir Jim needed to struggle laborious to maintain it.
But preventing is one thing by which, by then, he was already well-versed.
Ineos has fought plenty of battles down the years – as an illustration, demanding public cash from the Blair authorities to maintain Runcorn alive and dealing with down unions at Grangemouth over their pension advantages.
The banks discovered him no much less compromising.
He was equally uncompromising when, in 2013, he truly closed Grangemouth – then dropping £10m per thirty days – after unions refused to conform to modifications in working situations.
They finally backed down.
One uncommon setback for Sir Jim has been in fracking.
He has lengthy argued that the UK would get pleasure from as shiny a future in manufacturing had been power prices for companies as little as they’re within the United States and, to that finish, has spent tens of tens of millions of kilos on fracking initiatives within the UK – all to no avail.
He has since invested closely in hydrogen know-how.
In the meantime, the acquisitions have picked up once more at Ineos, most notably with the 2017 buy of the Forties Pipeline System from BPO.
During the final decade or so, although, Sir Jim has additionally began to get pleasure from his wealth.
He has purchased the Belstaff clothes model, soccer golf equipment in France and Switzerland, supported an America’s Cup problem in crusing and turn out to be a principal companion of the Mercedes F1 crew.
He purchased the Team Sky biking franchise, which has since been rechristened Team Ineos, and has invested £1bn within the Grenadier, a 4×4 automobile he hopes will succeed the Land Rover Defender.
There was additionally an try to purchase Chelsea earlier within the 12 months.
An acquisition of Manchester United, although, could be of an entire completely different order to any of these offers.
It is tough to see how a deal occurs in the intervening time.
The Glazers usually are not prepared sellers in the way in which BP, ICI, BASF and the opposite large multinational firms who’ve bought Ineos belongings down the years had been.
If he has genuinely put his thoughts to it, although, Sir Jim’s dedication ought to by no means be underestimated.
Source: information.sky.com”