The record 19-time English champion Manchester United will be Wall Street’s latest pop IPO, as the team has filed with the Securities and Exchange Commission to list class A ordinary shares on the New York Stock Exchange. The team is the world’s most valuable – according to Forbes, they are worth $385 million more than the New York Yankees and the Dallas Cowboys. The team’s listed placeholder value for the offering is $100 million, though it is unknown how many shares it will sell and at what price. Originally, the club eyed a $1 billion IPO in Singapore last year, and was traded on the London Stock Exchange in the early nineties. (Read more…)
The SEC filing contains the team’s revenue for nine months, ending on March 21, 2012; that is, 245.8 million pounds, a 6.1% increase from the same time period in the year before. Forbes posits that Manchester United is worth $2.24 billion overall, ranking above the two teams tied for second – the New York Yankees and the Dallas Cowboys. The club does, however, carry considerable debt:
“We intend to use all of our net proceeds from this offering to reduce our indebtedness,” the team’s filing said. United is in debt $663 million as of March 31, 2012, with interest rates of 8 3/8 and 8 3/4 percent.
The F-1 Registration Statement includes Jefferies, Credit Suisse, J.P. Morgan, Bank of America, Merrill Lynch and Deutsche Bank Securities as the underwriters of the IPO. Morgan Stanley, originally involved, backed out after disagreements over the team’s value. The Glazer family, owners of the team, believed the team to be worth in the neighborhood of $3 billion, which Morgan Stanley believed to be too high.
Under the reorganization of the team, it would become a wholly owned subsidiary of Manchester United Ltd., a newly created holding company based out of the Cayman Islands. Who knows – perhaps part of the deal to help the world’s largest sports team get out of debt was a backroom agreement to turn their accounts into slush funds for the biggest players in global finance.
That the IPO is a risky endeavor should be clear enough. Nearly two months ago, the Facebook IPO turned into a command-and-control price fixing operation by the major financial institutions that underwrote it. Clearly, the IPO was mismanaged, and an army of emotionally driven investors were skinned of thousands of dollars. They had come to love and even be addicted to Facebook, and so, in their minds, valued it higher than it was worth.
The same holds true for Manchester United. Millions of fans would want a piece of the team, overvaluing them in the process. The high financial underwriters might be interested in sponsoring the sort of hype that surrounded the Facebook IPO, thus adding to the illusion.
[VIA Silver Vigilante]