Man Utd picks NYSE for U.S. public offering
Manchester United have announced that is has chosen 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.
The United States-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. The amount of $100 million is much less than the initial flaunted amount of $1 billion Manchester United was hoping to raise in Asia. This 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.”
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.
Owned by the American Glazer Family since 2005, the club is straddled in a mountain of debt, 423.3 million pounds as of 31 March 2012. But its revenue stream is more than capable of repaying it, though most supported have criticized the owners for its perceived unethical behaviour. Most fans are of the opinion that the debt financing may be taking away money that could be invested in players to achieve success on the field.
The public offering could assist the club in driving down the amount of debt it currently has on its books. Analysts have looked at the listing with mixed feeling.