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George Soros takes minority stake in Manchester United

Wed 22nd Aug 2012 | Money & Finance

Billionaire financier George Soros has been revealed as the first major investor in Manchester United’s initial public offering (IPO) on the New York Stock Exchange (NYSE).

The high-profile Hungarian-American business magnate has secured a 1.9% stake in the Premier League club through his hedge fund, Soros Fund Management LLC.

United’s much-hyped IPO made its debut on the NYSE on August 9. Heading into the first day of trading the club had reduced the pricing of its IPO to $14 after initially stating it would offer 16.7 million shares between $16 and $20, a pricing that would have given the club a top-range valuation of $3.3 billion.

According to a filing with the U.S. Securities and Exchange Commission, Soros Fund Management has acquired 7.85% of United’s Class A shares. Soros was likely drawn to United because of the Premier League’s recent media rights deal, said Philip Hall, a partner at New York-based investment bank Inner Circle Sports which has advised on high-profile Premier League takeovers including Fenway Sports Group’s acquisition of Liverpool.

The Premier League secured a huge 70% rise in the value of its domestic live broadcast rights in June, with BSkyB and BT splashing out a combined £3.018 billion in an agreement spanning three seasons from 2013-14 to 2015-16. “This could be a play by Soros on the strength of Manchester United’s brand and the English Premier League’s growing media rights,” Hall told Reuters. “The domestic rights are set to increase 70% for the 2013-14 season and the international media rights, set to be announced in late October or early November, are also expected to come in at a very robust uplift.”

Soros’ investment in United is not the first time he has eyed the football market. The 82-year-old was close to a takeover of Italian Serie A club AS Roma in 2008, before deciding against it. Thomas DiBenedetto’s American consortium was ultimately confirmed as the new owner of Roma in August 2011, bringing an end to a long-winded takeover saga.

At a price of $14 per share, Soros paid $43.6m for this stake. At yesterday's closing price of $13.06, the stake is now worth c. $40.7m.

Posted by: Kev Howland




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