Britain's Manchester United Soccer Club Details IPO Plan

Monday, 30 Jul 2012 04:40 PM

 

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Manchester United Ltd., the English soccer team with a record 19 national championships, plans to raise as much as $333 million in a U.S. initial public offering.

The company and its selling shareholder, the Glazer family, are offering 16.7 million shares at $16 to $20 each, according to a regulatory filing Monday. United, whose players include England’s striker Wayne Rooney and Welshman Ryan Giggs, filed for the U.S. IPO July 3.

United chose a U.S. sale after scrapping plans for an offering worth as much as $1 billion in Singapore. The club is taking advantage of a rebound in the U.S. market, which froze this year following Facebook Inc.’s disappointing debut, to raise money to pay down debt, said Ipox Schuster LLC’s Josef Schuster.

“Manchester United is such a strong brand and probably has some upside with the merchandising,” said Schuster, who helps oversee about $2.5 billion at the Chicago-based investment firm. “It could still be viewed as attractive by some institutions if it’s priced in the right range.”

General Motors Co., the world’s largest carmaker, announced today that it signed a seven-year deal to have its Chevrolet brand on United’s jerseys. The contract begins in 2014, according to a press release. Insurance company Aon Corp. pays about 20 million pounds ($31 million) a year for its logo to appear on the team’s red shirt under its current accord.

Club’s Expansion

United’s sponsorships and product licensing helped generate 89.5 million pounds of revenue in the nine months through March 31, more than one-third of total revenue, filings show. That’s 17 percent more than the year-earlier period.

The club has doubled its followers to about 659 million over the past five years, bolstered by fans in Asia. Profit at the club in the 12 months through March 31 was about 38 million pounds, with sales of 345.6 million pounds, according to filings.

Long-term debt at United totaled 417 million pounds as of March, according to the filings. The club is controlled by the Glazer family of the U.S., which acquired United for 790 million pounds in 2005. The Glazers also own the National Football League’s Tampa Bay Buccaneers.

Glazers’ Stake

The Glazers, who have full ownership of United, hold Class B shares, which are entitled to 10 votes apiece. The Class A shares being sold in the IPO get one vote each, according to filings.

Jefferies Group Inc., Credit Suisse Group AG and JPMorgan Chase & Co. are leading the U.S. offering for the soccer club. Morgan Stanley, which had been hired to lead the sale in Singapore, is no longer working on the sale. The club plans to list on the New York Stock Exchange under the symbol MANU.

Last week was the busiest for U.S. IPOs since April, led by offerings from steakhouse chain Del Frisco’s Restaurant Group Inc. and Tex-Mex restaurant operator Chuy’s Holdings Inc. Companies have raised $36 billion in U.S. IPOs so far this year, according to data compiled by Bloomberg.

© Copyright 2014 Bloomberg News. All rights reserved.

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