Manchester United Said to Get Singapore’s Approval for Listing Story Tools

Manchester United Said to Get Singapore’s Approval for Listing Story Tools

Singapore’s stock exchange approved Manchester United’s application to raise about $1 billion in an initial public offering in the city-state, two people with knowledge of the matter said.
As much as two-thirds of Manchester United’s offering will likely be in preferred shares, which may carry at least double the dividend of ordinary stock while lacking voting rights, said the people. They declined to be identified as the IPO process is private.
United’s dual-share structure offers a way for the Glazer family to retain control of the football club after the IPO, the people said. Singapore’s bourse lured United in part by offering a speedier approval process for the IPO, people with knowledge of the matter said last month. United applied for the Singapore listing on Aug. 18, they said.
“Football clubs around the world are mostly quite closely held and not very transparent,” Pearlyn Wong, an investment analyst in Singapore at Bank Julius Baer & Co., which manages about $190 billion globally. “They don’t like to give up voting rights so they can make faster decisions over things like players and management.”
United, which was planning to list in the first half of October, is reviewing the IPO timeline amid volatile markets, the people said. Stock offerings have dwindled worldwide as Europe’s escalating sovereign debt crisis and a faltering U.S. economy dented demand for new equity.
Manchester United spokesman Philip Townsend and Singapore Exchange spokeswoman Carolyn Lim declined to comment.
Bundled Offering
The preference shares will be bundled with ordinary shares for the offering, though each security will be quoted separately on the stock exchange, the people said.
“Usually preference shares come as a follow-up offering, rather than at the IPO stage,” Julius Baer’s Wong said. “Whether people will receive the share structure well depends on how much dividends they can get and whether the company has the cashflows to support it.”
The 19-time English soccer champion’s decision to sell shares in Asia was also prompted by its growing fan base in the region, people familiar with the matter said last month.
United first toured Asia four decades ago and plans to do so again next year. When the club last made the trip, the players were mobbed by supporters wearing replica shirts bearing names of stars like Wayne Rooney and Ryan Giggs.
United’s pretax profit in the year ended June 30 was 29.7 million pounds, compared with a loss of 15 million pounds last year. It’s the second time in six years the club has been profitable.
’Sucked In’
The lack of sustained earnings may repel investors, said Lee King Fuei, a Singapore-based fund manager at Schroders Plc, which oversaw $323 billion as of June 30.
“Institutional investors are unlikely to be interested, while retail investors will be the ones sucked in by the branding and marketing,” he said. “The lack of voting rights is just a kick in the teeth.”
The company hired JPMorgan Chase & Co. and Morgan Stanley as bookrunners for the IPO together with Credit Suisse Group AG, three people with knowledge of the matter said last month. United also picked BOC International Ltd., CLSA Asia-Pacific Markets, CIMB Group Holdings Bhd. and DBS Group Holdings Ltd. as co-lead arrangers for the offering, the people said.

adapted from bloomberg

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