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Manchester United files for IPO in US
NEW YORK (AP) - Manchester United plans to go public. In the United States, to boot.
The record 19-time English champions filed a registration statement with the Securities and Exchange Commission on Tuesday to hold an initial public offering of stock and become a listed company on the New York Stock Exchange. The deal could ease pressure on the club’s cash flow as it tries to keep and acquire players in an attempt to regain English and European titles.
While the stock price and the number of shares were not listed, the registration statement said the club hoped to raise a maximum of $100 million _ a place-holding figure that could change before the offering becomes effective.
“We intend to use all of our net proceeds from this offering to reduce our indebtedness,” the team’s filing said.
The Glazer family, which bought the club in 2005, would retain control through Class B shares, which would have 10 times the voting power of the stock that would be sold to the public.
Under the reorganization, the team would become a wholly owned subsidiary of Manchester United Ltd., a newly formed holding company based in the Cayman Islands.
United has been looking to raise funds to help reduce debt from the 2005 takeover that was 423 million pounds ($663 million) as of March 31, much of it with interest rates of 8 3/8 and 8 3/4 percent. A $1 billion offering on the Singapore stock market was pursued last year, but the plans were halted due to volatile global markets.
The team, European champions in 1968, 1999 and 2008, has been valued at $2.24 billion by Forbes magazine, ranking it as soccer’s most valuable club for the eighth year in a row.
The Red Devils were on track to their 20th league title this year, taking an eight-point lead in the final weeks of the season. But crosstown rival Manchester City, which became soccer’s biggest spender following its purchase by Sheikh Mansour bin Zayed bin Sultan Al Nahyan of the United Arab Emirates, won the title on goal difference on the final day of the season.
“In the Premier League, recent investment from wealthy team owners has led to teams with deep financial backing that are able to acquire top players and coaching staff, which could result in improved performance from those teams in domestic and European competitions,” the filing said.
Manchester United said that it had a loss from continuing operations of $47.5 million in the year ending June 30, 2010, then had a profit of $13 million in the following year. It said it had an unaudited profit of $38.2 million in the nine months ending March 31.
A nearly 300-page prospectus to the SEC contains a series of warnings about the state of the club’s finances.
The filing says “our indebtedness could adversely affect our financial health and competitive position” and reduce “the availability of our cash flow to fund the hiring and retention of players and coaching staff.”
United also warned that new UEFA spending restrictions “could negatively affect our business.”
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