Print

Email story

Comment

Email editor

Team Glazer battles on, off field

Manchester United is out of Europe's top tournament, and Zapata Corp. is selling shares in some companies.

By LOUIS HAU
Published December 9, 2005

Well, at least Tampa Bay Buccaneers owner Malcolm Glazer has one team in the playoff hunt. It's been a tough week on and off the field for Glazer's other sports franchise, British soccer club Manchester United, while the mogul's business holdings outside the sports realm are under financial pressure.

Man U, one of the most dominant forces in British soccer, lost 2-1 Wednesday to Benfica of Portugal in the Champions League, the annual European soccer tournament.

The defeat will keep Man U from reaching the "knockout stage" of the top 16 teams for the first time since 1995.

Not only is the loss a blow to Man U's prestige, analysts expect it to cost the team dearly in sponsorships. Moreover, it came three weeks after British wireless carrier Vodafone Group decided to end a major, four-year sponsorship deal with Man U at the end of the English soccer season in May, two years earlier than expected. The deal is worth 9-million pounds (about $15.8-million) a year.

Meanwhile, the board of Glazer's Zapata Corp. on Thursday authorized the Rochester, N.Y., company to seek a buyer for its 58 percent stake in Omega Protein Corp., a maker of fish-meal and fish-oil products.

The announcement follows on the heels of Zapata's completion last week of the sale of its 77.3 percent equity stake in air-bag manufacturer Safety Components International Inc. for about $51.2-million.

Whether Zapata's moves are related to the financial shortfalls at Man U isn't clear. Zapata has been trying to sell Safety Components since July 2004. Glazer secured a controlling stake in Man U just seven months ago after a prolonged campaign of accumulating shares in the club.

If there is a link, it may not be the first time challenges associated with Glazer's roughly $1.5-billion takeover of Man U has affected his other holdings. Business Week reported last year that the Securities and Exchange Commission was investigating run-ups in the stock prices of Zapata and Omega, which the magazine said appeared to coincide with increases in Glazer's Man U stake. And in April, Zapata completed an eight-for-one stock split of its outstanding shares of common stock just as Glazer was close to securing a controlling interest in Man U.

Executives at Zapata and Omega, including Zapata chairman, president and chief executive Avram Glazer, Malcolm Glazer's son, didn't return phone calls Thursday seeking comment.

In a statement discussing its plans to seek a buyer for Omega, Zapata said it "plans to continue to evaluate strategic opportunities for using its capital resources."

Timothy Ramey, an equity-research analyst for D.A. Davidson & Co. of Lake Oswego, Ore., noted in a research report Thursday that this wasn't the first time Zapata expressed an interest in exploring such strategic alternatives. "However, this time it seems more committed and the recent sale of its interest in Safety Components International . . . points to a liquidation of Zapata," Ramey said.

Ramey concluded that the mostly likely scenario for Omega is for Zapata to sell the company to a major food ingredient manufacturer, such as Archer Daniels Midland Co. of Decatur, Ill.

Zapata was founded in the mid 1950s by former President George Bush as an oil and gas company that later went into the manufacture of fish-oil products. After the Glazer family became its largest shareholder, Zapata branched out into ventures including manufacturing air-bag fabrics and an Internet business.

Omega, which like its parent Zapata is publicly traded, has suffered from an industry downturn. Fish catches in 2003 and 2004 were sharply below expectations and the company's gulf coast processing facilities were severely damaged by hurricanes Katrina and Rita.

Zapata announced plans to seek a buyer for Omega Thursday before trading opened. The company's stock rose 33 cents to close at $6.31 a share. Omega Protein's stock closed at $6.46 a share, up 53 cents.

Information from Times wires and Times files was included in this report. Louis Hau can be reached at 813 226-3404 or hau@sptimes.com

[Last modified December 9, 2005, 01:18:14]