Manchester United, which is preparing to kick-off its flotation in New York tomorrow, is due to price its shares tonight amid signs that enthusiasm for the deal is growing.
The club is on the last leg of a two-week marketing push and sources said that the initial public offering (IPO) is already oversubscribed as US investors proved receptive to the float.
However, James Clunie, investment director for UK equities at Scottish Widows Investment Partnership, said the Edinburgh-based fund manager was unlikely to be interested in investing in the club “because it almost looks like it’s going round the world trying to see who will pay the most, as opposed to listing in the market where people know you and getting the right price”.
Manchester United chose New York for its flotation after scrapping listings in Hong Kong and Singapore, and is set to raise as much as $333 million (£213m).
In an IPO filing with the US Securities & Exchange Commission (SEC), the club said it expects its shares to be priced at between $16 to $20 each.
At the top end of that range, it would have a market value of about $3.3 billion. In comparison, Real Madrid, which has a record nine Uefa Champions League titles and is owned by its members, has an estimated value of about $1.9bn.
Malcolm Glazer, the Florida-based businessman who took Manchester United private in 2005 through a debt-financed £790m deal, will remain firmly in control of the club after its IPO, with 89.8 per cent of the combined class A and B shares.
The Glazer family’s class B shares will have ten times the voting power of the class A shares being offered to the public and fans have been angered by news that the club’s debt pile, which stood at £423.3m as of 31 March, will only be reduced to about £345.4m through the IPO.
In its IPO filing, the club said it expects to report total revenues of £315m to £320m for the year to 30 June, a fall of up to 5 per cent compared with the previous year’s figure of £331.4m.
Total operating expenses are forecast to rise to between £283m and £286m, up from £272.7m a year ago, because of higher player and staff wages.
However, the club is trying to convince potential investors that it should be seen as a powerful global brand and not just a sports team with fickle fortunes that shift on the outcome of every match. US car giant General Motors is to pay $559m to have its Chevrolet logo on the club’s shirts under a seven-year deal starting in 2014.
Sources said that Jefferies, the lead underwriter for the IPO, is positioning the club as a high-growth consumer brand, while JP Morgan and Credit Suisse are marketing it as an e-commerce company, comparing it to online giant Amazon. Deutsche Bank sees it as a media company, comparing it to the likes of Walt Disney, sources said.
One fund manager, who attended a marketing roadshow in New York, said: “With Disney, you’re not going to go see a movie or buy merchandise because you have any sense of loyalty to the company.
“But with Manchester United, you have a huge global base of fans.”
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