Man Utd IPO paints Big Apple red

The owners of the most successful English football club are floating the business to raise $100m, and hopefully pay down some of its huge debt.

by Michael Northcott
Last Updated: 19 Aug 2013

When the Glazer family acquired Man U in 2005 for £790m, it was already a listed company and many thought it could be another case of a private owner suddenly realising that there is no money to be made in owning a football club. Alan Sugar learned that the hard way when he bought Tottenham Hotspur FC in the ‘90s. But Man U is one of the few clubs that actually does the business of football well, and now the family is floating it on the NYSE with a nominal funding target of $100m. At this target, it will only to be a portion of the club that becomes available for trading.

So if it is such a successful club, why on earth do they need to float it? Simple answer: despite its profitability, it still has huge debts. The club currently owes around £423m, partly because the Glazers took out huge loans to buy the club, and despite having converted these loans into a bond in order to reduce the interest, the leverage is still a rod for the club’s own back. In the club’s filing with the US Securities and Exchange Commission for the float, the papers explained that any money raised would be used to pay down some of that annoying debt pile. 

The club will no doubt be an attractive proposition to investors however – it is one of the most bankable brands in the world (thanks to way it converts success on the pitch into global reach), and it carries billions of pounds worth of merchandise affiliations all over the world, too. Its fans are zealously (fanatically, you might say) loyal to the team, and it is hard to see how things could go belly-up if the Glazers’ next move is to pay down a load of debt. Hell, the folks at MT are on the phone to the broker already!

There are even rumours that, as with the Facebook IPO earlier this year, the figure in the SEC filing is purely nominal and could increase to as much as $1bn ahead of shares actually beginning to trade. That would clear the clubs debts in one fell swoop, and make the Glazers of Man U even more astronomically wealthy than they already are. There were also rumours that they may choose to float the business in Hong Kong, mysterious as that sounds…

But as with all IPO announcements, we now have the painfully slow march towards the actual day when you can get your hands on a share. We’ve got our eyes on the ticker tape…

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