Rumours abound that Manchester United’s owners are preparing an Initial Public Offering (IPO) to sell $1 billion dollars of shares on the Singapore Stock exchange. We attempt to tease out what’s going on
There have been reports for some time that the Glazers are preparing an exit strategy from their acquisition of Manchester United football club.
An exercise in kite flying?
In June, LWD noted that news of a floatation in Hong Kong seemed to be an exercise in kite flying.
More substantial evidence
This time, the story is backed up with more substantial evidence. The Wall Street Journal reported [Aug 16 2011] “United, which was listed on the London Stock Exchange as Manchester United PLC before a £790 million ($1.29 billion) takeover by the Glazer family in 2005, had initially planned to list in Hong Kong, but changed its mind and has now picked Singapore as a listing venue.”
Maximum offer assessed as ‘15% – 25%’
Bloomberg suggests that a proposed offering would involve sale of 15%-25% of the shares in the club.
What’s going on?
The club has so far exercised its right not to comment. Like any entrepreneurial owners, the Glazers have been developing an exit strategy for their venture into acquiring Manchester United. If such an IPO is successful, the club will arguably have restructured its debts somewhat. This in turn will be a step towards an eventual change of ownership.
Will more cash buy more success on the field?
Fans will hope for more cash to acquire top players as needed to compete at the very highest levels in world football. The situation is seen as more urgent since two major rivals in the UK (Chelsea and more recently Manchester City) have billionaire owners and more financial resources. If cash for players is to be the major factor in success, then MUFC fans will also be hoping that another billionaire will enter the fray some time further down the line.
Interestingly, Manchester United, current champions of the UK’s Premier league, have been remarkably successful under the stringent financial constraints of the Glazer regime.