Wednesday 13 November 2019

Man Utd shares fail to 'pop' for Glazers as IPO falls short by $50m

Keith Weir

Shares in Manchester United made a lacklustre debut as they opened for trading yesterday just above their initial public offering (IPO) price.

The failure of the shares to 'pop' on the club's trading debut on the New York Stock Exchange was a second blow for the listing, as underwriters lowered the price to $14 (€11) late on Thursday after pitching the offering to investors with a range of $16 to $20.

Manchester United sold 16.7 million shares as planned, but below the expected range of $16 to $20. The stock rose 5c in initial trades on the New York Stock Exchange and then flattened out.

A mystery to most Americans but a household name in most of the world, the club listed on a US exchange after pulling a planned IPO in Singapore earlier this year.

Proceeds

The offering valued the 19-times English champions at $2.3bn but shaved as much as $100m off the proceeds that had been expected for the team and its owners.

The $233m ultimately raised in the IPO will be split equally between the 134-year-old club and its owners, the Florida-based Glazer family, owners of the Tampa Bay Buccaneers NFL team.

The loss of as much as $50m in expected proceeds for the club will be a blow as it copes with a heavy debt burden and seeks to buy new players, who cost tens of millions each. United had debt of £422m (€538m) at the end of March.

A group of United fans who are campaigning for greater involvement in the ownership of the club jeered the Glazers.

"It would seem all the analysis of the true valuation was correct; the Glazers and their advisers were being far too ambitious -- or perhaps greedy -- and the true value of the shares should be around $10 rather than the $20 the Glazers were seeking," said Duncan Drasdo, chief executive of the Manchester United Supporters Trust (MUST).

"It means less money coming into the club to pay down the Glazers' debt and, more annoyingly, the Glazers still take further money out of the club for their own personal means," he added.

MUST is calling for the Glazers to sell and allow fans to play a greater role in the club's ownership.

The Red Knights, a group of wealthy fans including Goldman Sachs head of asset management Jim O'Neill, weighed a bid for United two years ago but were put off by the price.

The Glazers bought United for £790m in a highly leveraged deal in 2005, taking it private after 14 years on the London Stock Exchange.

Some fans argue that the cost of the debt has forced up ticket prices for the club, which draws sellout crowds of around 76,000 at its Old Trafford Stadium and claims 659 million followers across the world.

They also say repayments have hindered the team's ability to compete with big-spending rivals on the pitch. United fans will be able to demonstrate their feelings over the club's ownership when the Premier League season begins. (Reuters)

Irish Independent

Also in Business