Man United picks NYSE for US public offering
Reuters - Wednesday 04 July 2012, 02:15
Manchester United has picked the New York
Stock Exchange to make its stock market debut, ending months of
speculation over where the world's best-supported football club
would list.
After first eyeing a Hong Kong IPO, the former English
Premier League champions had planned a $1 billion listing in
Singapore in the second half of last year before putting plans
on hold because of market turmoil.
The U.S-owned club filed with the Securities and Exchange
Commission on Tuesday to raise up to $100 million in an initial
public offering of its Class A ordinary shares in New York.
In the United States, the amount of money a company says it
plans to raise in its first IPO filings is used to calculate
registration fees. The final size of the IPO could be different.
Thomson Reuters publication IFR reported last month that the
club, which has been English champions a record 19 times and
features players such as England's Wayne Rooney, had dropped its
plans for an Asian listing in favour of a U.S. listing.
The company filing for a much lower amount than $1 billion
originally expected does not come as much of a surprise, said
Josef Schuster, founder of Chicago-based financial services firm
IPOX Schuster LLC.
"The smaller the float, the higher the relative valuation
can be... this may just be a strategy initially to make it appear
like a low float IPO," Schuster said. "Traders may believe if
the deal is very low, then the company can pop at the opening."
GLOBAL FAN BASE
Manchester United has a global fan base of 659 million,
according to a survey commissioned by the club and carried out
last year by market researcher Kantar. Almost half of United's
supporters were in the Asia-Pacific region.
"It remains to be seen how much the football club is going
to benefit in the U.S. where the sport is not very popular... the perfect place for it to have listed should have been
London," Jay Ritter, a University of Florida IPO expert told
Reuters.
The club, founded in 1878 as Newton Heath LYR Football Club,
plays its home games at Old Trafford in Greater Manchester.
The club's American proprietors, the Glazer family, are well
known in the United States as owners of American football team
the Tampa Bay Buccaneers.
However, they have faced opposition from United fans after
taking over the club in 2005 in a leveraged buyout that left it
saddled with hefty debt repayments.
The club's total debt as on March 31 was 423.3 million
pounds, according to the filing.
It intends to use the net proceeds from this offering to
repay debt.
"It is going to come down to the valuation. U.S. investors
are not going to jump on it right away," IPOX Schuster LLC's
Schuster said.
The Glazer family will hold class B shares, which will have
10 votes each representing 67 percent of the voting power of all
shareholders, keeping the club's management within their
control.
U.S. investors are familiar with the dual-class share
structure, which has been used by household names such as
Google, Facebook and News Corp.
Jefferies, Credit Suisse, J.P. Morgan
, Bank of America Merrill Lynch and Deutsche Bank
Securities are underwriting the IPO, Manchester
United said in a preliminary prospectus. This leaves out Morgan
Stanley, which h was one of the investment banks
originally expected to underwrite the Singapore listing.
United did not reveal how many shares it plans to sell or
their expected price.