Manchester United has picked the New York Stock Exchange to make its stock market debut, ending months of speculation over where the world’s best-supported soccer club would list.
After first eyeing a Hong Kong initial public offering (IPO), the former English Premier League champions had planned a US$1 billion listing in Singapore in the second half of last year before putting plans on hold because of market turmoil.
The US-owned club filed with the Securities and Exchange Commission on Tuesday to raise up to US$100 million in an IPO of its Class A ordinary shares in New York.
In the US, the amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.
The club has been English champions a record 19 times and features players such as England’s Wayne Rooney. The company filing for a much lower amount than the US$1 billion originally expected does not come as much of a surprise, said Josef Schuster, founder of Chicago-based financial services firm IPOX Schuster LLC.
“The smaller the float, the higher the relative valuation can be ... This may just be a strategy initially to make it appear like a low float IPO,” Schuster said. “Traders may believe if the deal is very low, then the company can pop at the opening.”
Manchester United has a global fan base of 659 million, according to a survey commissioned by the club and carried out last year by market researcher Kantar. Almost half of United’s supporters were in the Asia-Pacific region.
“It remains to be seen how much the football [soccer] club is going to benefit in the US where the sport is not very popular ... The perfect place for it to have listed should have been London,” said Jay Ritter, a University of Florida IPO expert.
The club, founded in 1878 as Newton Heath LYR Football Club, plays its home games at Old Trafford in Greater Manchester. The club’s proprietors, the Glazer family, are well known in the US as owners of the US football team the Tampa Bay Buccaneers.
However, they have faced opposition from United fans after taking over the club in 2005 in a leveraged buyout that left it saddled with hefty debt repayments.
The club’s total debt as on March 31 was ￡423.3 million (US$663.67 million), according to the filing. It intends to use the net proceeds from the offering to repay debt.
United did not reveal how many shares it plans to sell or the expected price.