A report in the Wall Street Journal and quickly picked up by other media suggests that Manchester United is to float a stake in the club on the Singapore stock exchange in the autumn. The exact amount to be offered is not known, but the figure of 25 to 30 per cent has been mentioned. Credit Suisse have been appointed as advisers to the float, but are refusing to comment.
A report in the Wall Street Journal and quickly picked up by other media suggests that Manchester United is to float a stake in the club on the Singapore stock exchange in the autumn. The exact amount to be offered is not known, but the figure of 25 to 30 per cent has been mentioned. Credit Suisse have been appointed as advisers to the float, but are refusing to comment.
The Wall Street Journal is normally an authoritative source on such matters, but a note of caution is necessary as was emphasised by football finance expert Tom Cannon in an interview on Radio 5 this morning. At the moment the story is just a rumour, albeit an intriguing one. By dint of repetition in various media outlets, such stories can acquire an authority they lack. However, it is perhaps significant that the Financial Times has made it its lead company and markets story and covered it in depth in three articles.
One can understand why United might want to make a public offering of shares in Asia where it is said to have 190 million fans. Several United commercial deals are tied to the Asian market, including a Smirnoff deal with Diageo and several mobile phone arrangements. Asian demand for the club’s £500m bond issue last year was strong.
A listing in Asia would tap demand for MUFC branded share certificates. However, the usual vehicle for such offerings is the Hong Kong stock exchange. It has a highly active retail investor base which is arguably well suited to a big international sporting stock. The Singapore exchange is relatively small by global standards.
The club’s advisers are understood to have thought that Hong Kong’s investor base was too narrow. There may also have been a concern about too close an association with China when the club’s fanbase is spread throughout Asia. Disclosure in Singapore is lighter and wealthy investors are more easily targeted. Attracting the United offer will be regarded as a coup by the Singapore Exchange which has invested substantial effort in attracting significant listings from overseas.
The release of capital would enable the Glazers to pay down some of their debts whilst retaining control of the club which has been described as the richest sports franchise in the world. United pay £45m a year servicing debts of £515m. This is slightly more than Sir Alex Ferguson’s net spending in the summer transfer window.
The Glazers paid off their high interest payment-in-kind notes last November, but questions remain about how or by whom they were repaid. The suspicion remains that there is unfinished ‘PIK’ business. The United blogger and consistent Glazer critic, Andy Green, has suggested that the owners may have problems with their property assets in the US.
The Financial Times cannot resist a dig at Wayne Rooney in their Lombard column: ‘Wayne Rooney, a striker who could pass as a member of Mr Potato Head’s extended family, is a curious mascot for globalisation. But that is what he would become if United lists in Singapore.’
The Pink ‘Un also warns, ‘Paradox-spotters may then reflect that the more the club becomes emblematc of British football overseas, the less it will enjoy that staus in the UK.’