Man Utd flotation on track to raise up to $330m and value club at $3.3bn


THE INITIAL public offering of Manchester United is on track to be finalised by this evening in spite of some criticism over how one of the world’s most followed football clubs is going public, according to people close to the deal.

The English club, bought by the Glazer family in 2005 for £790 million, is offering 16.7 million class A shares which are set to price today at between $16 and $20 apiece, before listing on the New York Stock Exchange tomorrow.

One person close to the deal said those involved were confident the IPO would be successful. “Institutional investors have shown strong interest. The ratio of conversion from attendance at roadshow events to firm indications of interest has been better than usual,” he said.

At the high end of its price range, the IPO would raise $330 million and value the club at $3.3 billion. At $18 per share, Man Utd would have a market capitalisation of $2.95 billion with an enterprise value including debt of $3.38 billion, according to data provider Morningstar.

Morningstar said that pricing would be above its fair value of about $10 a share.

“However, shares could trade at a significant premium to our fair value estimate if the market values the soccer team in line with other successful sports franchises,” its analysts said.

The Glazer family have had to scale back their capital raising target to about $300 million from $1 billion after efforts in the past year to sell shares on exchanges in Hong Kong and then Singapore failed to garner sufficient demand.

Some institutional investors have questioned the dual class voting structure which will mean the Glazer family retain control through shares that have 10 times more voting power than publicly traded shares.

Under the IPO, in which they will make one-tenth of the club available to the public, the Glazers will keep the proceeds from the sale of 8.33 million shares with the rest being used to pay down debt, reportedly £423 million.

A successful IPO would result in investors owning 42 per cent of the club’s A shares but only carrying voting rights of 1.3 per cent.

As well as generating about $140 million for the Glazer family, a successful listing for the club would be a coup for Jefferies, the New York-based investment bank which is leading the offering. – (Copyright The Financial Times Limited 2012)