United for sale at discount price! Red Devils' shares to trade for half a billion less than planned
09:35 GMT, 10 August 2012
Manchester United shares will start trading in New York on Friday at a big discount on the club's earlier expectations over its worth.
United's advisers will offer a 10% stake at a price of 14 US dollars (9), valuing it at around 1.5billion, but much lower than the range of 16 to 20 US dollars (10-12) it had hoped to achieve, worth up to 2.1billion.
The club, bought by the Glazer family in 2005 for about 800million, will raise about 233 million US dollars (149million) and this will be partly used to pay off some of its debt.
Say what Manchester United shares will go for less than first planned
The lower flotation price comes after the Glazer family, which also owns the Tampa Bay Buccaneers NFL gridiron team, previously failed to garner sufficient support to sell shares on exchanges in Hong Kong and Singapore.
However, United, which claims to have a global fanbase of about 660million and has won a record 19 league titles, is still one of the world's most valuable sports teams.
Its shares will begin trading today under the stock market ticker Manu.
Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said the lowering of the flotation price was 'disappointing but not unexpected'.
He added: 'As was the case with the UK experience, football clubs are notoriously difficult investments, ultimately tied to the fortunes of the club on the pitch. However, interest in the sport is taking off in the US and last night's Olympics victory for the women's football team is likely to fuel interest further.'
It had been expected that the Glazers would make about 90million from the deal, with the remaining proceeds raised in the initial public offering (IPO) used to pay down some of the 134-year-old club's debt, which was last reported to be around 423 million.
Although the listing has been planned for some time, the Glazer family originally claimed all the proceeds would go towards paying down United's debt, angering fans.
A successful IPO would reportedly result in investors owning 42% of the shares available but only carrying voting rights of 1.3%.
Earlier this month, a leading Manchester United fans' group called for a boycott of the club's expanding portfolio of sponsors in protest at the planned flotation.
A statement from the Manchester United Supporters Trust (MUST) read: 'The Manchester United Supporters Trust has today called for a worldwide boycott of Manchester United sponsors' products, with support across the UK, Europe, Asia and the US.
'The boycott strategy is intended to send a loud and clear message to the Glazer family and club sponsors that, without the support and purchasing power of the fans, the global strength of the Manchester United brand doesn't actually exist.'
MUST has tried such tactics before during the Glazer regime, although it has not prevented the Red Devils' territory-specific approach allowing them to become the first club to smash through the annual 100million barrier for commercial revenue alone.