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Man Utd's Shares To Trade Below Expectation

Fri 10th Aug 2012 | Clubs Ownership

Shares in Manchester United are expected to trade at $14, much lower than expected and reducing the club’s value by as much as $100 million.

United’s initial public offering (IPO) had expected to raise over $3billionn but weak demand has forced the club to re-evaluate its offer and is now expected to raise only $2.3 billion.

16.7 million shares have been offered, with the proceeds to be split equally between it and its owners, the Florida-based Glazer family, a move which has angered many sections of United’s fan base.

A spokesperson for Manchester United Supporters’ Trust (MUST) criticised the IPO earlier this week stating: “Essentially the IPO is bad for investors, the club and the fans.”

MUST have also been heavily critical of the structure of the shares which will see investors gain only one tenth of the voting rights for each share.

“It has to stop and we want the IPO shelved and a proper fan ownership model put in place – one share, one vote”

The IPO had been intended to help pay off some the debt leveraged on the club by the Glazers’ takeover. The loss of as much as $50 million proceeds will be a blow as it copes with a heavy debt burden.

The club had planned to use the money to pay down its debt pile that dates back to the Glazers' $1.2 billion leveraged buyout in 2005. Manchester United's debt load stood at over $682 million as of June 30.

However, the deal will still make Manchester United the largest sports-team IPO on record, but the valuation is a setback for the 134-year-old club, which had to abort plans for an offering in Singapore and then saw Morgan Stanley leave the underwriting syndicate partly due to disagreements over valuation.

Manchester United will start trading today (Friday) on the New York Stock Exchange under the ticker "MANU", with the team's management expected to ring the opening bell at the exchange.

Posted by: Aaron Gourley

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