As the title suggests, the world’s most popular soccer club - Manchester United - is filing to go public in the USA, despite being an English soccer team. This is an interesting move as thoughout 2012 we have seen companies move over to the East to complete their IPO.
the company is selling shares to raise money and reduce its debt, which stands at about $655 millionThey passed over the Hong Kong Stock Exchange because it would not give the team a waiver to allow two classes of shares, with different voting rights. The London Stock Exchange also does not allow such share structures, perhaps the reason this natural home was skipped over by the Glazers.
Do you think this is a sign that the Western market is recovering / investors are gaining confidence? Will this be the transaction that sets off more activity in the West?
Check out the article here: http://dealbook.nytimes.com/2012/07/10/in-manches…
No to both of your questions. I will try to put a more detailed reply up sometime tonight/tomorrow.
In short, buying Man U shares is a questionable investment at best.
Just finished reading the first 1/3rd of the prospectus and skimming through the rest (a lot of repeated information), a few takeaways:
-They mentioned several times that we are an "emerging growth company" according to the JOBS act that Obama recently signed; meaning that we have less disclosure requirements (could be reason why they chose the NYSE as opposed to the Far East). I always think of the JOBS as more of an initiative for start-ups, but technically since we dont have much revenue (less than 1 billion) we apply under the act for the next few years -Looking to raise $100 million, although that may change, with the number of shares/price still not disclosed. This seems like a very small amont to float, why not just got for $400-$500 million and get rid of the debt altogether? -Proceeds will be used to pay down the debt, no dividends planned
Overall this is very good for the club, although I hope the float will be bigger. However, as much as I would like to invest in the club, I don't see too many good reasons to do so. A large amount of the operating results depend on on field performance, which of course is uncertain, and it jut does not seem like an attractive investment. However, I am sure many people will invest in it simply because of the popularity of the club (see Facebook IPO) which may cause it to pop on the first day because the float seems quite small, which is what they are hoping to achieve here.
The prospectus can be found here: http://www.sec.gov/Archives/edgar/data/1549107/000104746912007026/a2210…
An informative article on yahoo finance: http://finance.yahoo.com/news/manchester-uniteds-u-ipo-seen-111346340.h…
The article pretty much sums up my takeaway on this. As much as I love the club (I've had a tattoo of the team's crest on my back since I was 16), its a hard sell convincing someone that it is a good investment. In fact, Manchester United and Arsenal are one of the few well run clubs financially who are actually able to compete at the very top, and both are still questionable investments.
The fact is that football clubs dont exist to generate revenue for shareholders. They are hobbies for the owners, and every successful club out there is in terrible shape financially speaking, spending well beyond their means, either with debt or the more usual rout of being bankrolled by a Saudi or Russian billionaire.
So how do I buy one share (without the $50 cardboard frame!)
All is said in this article: http://www.economist.com/node/21558312
Interesting... i'm curious, what IB group handles the underwriting of sports teams?
They're doing it simply because they want the ability to emulate the new glut of tech firms that have gone public in the U.S. in the past decade with different classes of stock, granting the proprietors greater control over business decisions by restricting the rights of one class. This is not going to "spark off" more activity here.
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