Manchester United sets share price goal
One of world’s most popular football clubs plans to sell 16.7 million shares in attempt to tackle $742m worth of debt.
Published On 31 Jul 2012
Manchester United has said it plans to raise as much as $330m in a public share listing in New York.
In documents filed with the Securities and Exchange Commission, the football club said it will sell 16.7 million shares at between $16 and $20 each which values the club at $3.3bn at the top of the range.
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Manchester United was recently called the most valuable club in sport, worth $2.23bn, according to Forbes magazine.
Manchester United has been struggling with a hefty debt burden ever since being acquired by the family of Florida-based businessman Malcolm Glazer and his family in 2005.
The club’s proceeds from the IPO will be used to reduce its debt.
The Glazers will remain in a dominant position after the offering with 89.8 per cent of the Combined class A and B shares.
They will retain control after the sale because their Class B shares will have 10 times the voting power of average investors’ Class A shares.
The club currently has $742m of debt and $109m in cash.
The company’s latest financials revenue for the fiscal year 2012 is expected to be between $495m to $503m, which is down 3 to 5 per cent from the previous year.
That was mainly due to the broadcasting revenues, after the team failed to qualify for the knockout stages in the European Champions League.
The details of the sale were announced just as it was revealed that the club had signed a 7-year sponsorship deal with General Motors to have the Chevrolet brand on their shirts starting in 2014. The deal is worth roughly $600m, the Reuters news agency reported.
Manchester’s United will kick off a two-week investor roadshow on Wednesday, with stops expected in the United States, Europe and Asia.
The roadshow stops will be done concurrently, with two separate management teams covering different geographies. One will be responsible for meeting with investors in the US and the other with investors in Europe and Asia. Pricing is expected on August 9.
The team chose to list in the US after scrapping listings in Singapore and Hong Kong. It had originally looked to raise as much as $1bn in Singapore.
The Glazers, also own the US football team the Tampa Bay Buccaneers.
Manchester United who came second last season have won a record 19 league titles which makes them the most successful English football club.
Source: News Agencies