Muted response to United IPO
Shares in Manchester United priced below expectations and were essentially flat in early trading today, a disappointing stock market debut for the world's most famous soccer club and most valuable sporting team.
Manchester United sold 16.7 million shares as planned, but at a price of $14 each, below the expected range of $16 to $20.
This afternoon, shares were up 2 cents at $14.02, with turnover having tapered off sharply following an initial surge. Shares never dipped below $14 and were mostly steady within the initial five-cent range.
One of the club's top officials said the team took less money than planned because it preferred the mix of investors involved at the lower price.
"We priced below the range because as you sort of took a step back and looked at the book, the huge number of high-quality institutional investors that were there at $14 just made us more comfortable in terms of the longer-term view here with regard to
the type of investor base we wanted," said Ed Woodward, vice chairman of Manchester United, in an interview.
The club listed on a US exchange after pulling a planned IPO in Singapore earlier this year. The offering valued the club at $2.3 billion but shaved as much as $100 million off the proceeds that had been expected for the team and its owners.
The $233 million 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 among other interests.
The loss of as much as $50 million 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 of dollars each. United had debt of £423 million ($661 million) 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 £790 million pounds 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.
The Premier League season begins in just over a week, when United fans will be able to demonstrate their feelings over the club's ownership.
MUST has called for a boycott of the club's sponsors over the IPO.