Manchester United Seeks Singapore IPO

[Nick]

SINGAPORE—U.K. soccer club Manchester United Ltd. is planning to raise around US$1 billion from a Singapore initial public offering in the fourth quarter, people familiar with the situation said Tuesday, in the latest foreign listing to tap Asia's funding markets.....(read URL)

http://online.wsj.com/article/SB10001424...lenews_wsj [Full Article]

[Jared Seah]

Hey! This is cool!

We do need some high profile IPOs to give friendly competition to HKSE, and give our spurned lover ASX something to think about.

More depth and width to our SGX can only help our visibility. I still a bit sore that when you surf international business media websites under Asia region, you see Nikkei, HSI, ASX and China indexes. What about STI?

Patience. That will be the day when our STI becomes the top 3 stock exchanges in Asia. Switzerland of Asia?

Not vested in SGX; but staying tuned. (This FT CEO really rock-and-roll!)

[dydx]

Indeed, the ball is round and gets kicked around - in this case, from London, to Hong Kong, and likely land in Singapore. Don't get hit by the ball the wrong way, and suffer an injury!

A relevant question: Instead of having to deal with a set of different listing rules and other regulatory requirements, why can't Manchester United just raise more or less the same amount of capital in the familiar home market of London?

[Musicwhiz]

A relevant question: Instead of having to deal with a set of different listing rules and other regulatory requirements, why can't Manchester United just raise more or less the same amount of capital in the familiar home market of London?

Erm, Singaporeans are easier to con than Londoners?

[sgd]

how does anybody really know to put a 50million pricetag on a football player? I think football clubs though have large loyal fanbase but I think they are generally money losing enterprises, big drain on financial resources, these clubs agenda are not profit motivated if they were profitable why else would they need to come here.

I won't even consider to invest in this.

[lonewolf]

On the contrary, I think if SGX list Man U, then we are suckers - yet again.

The most relevant qn to ask is why would Man U choose to list here instead of London or Hong Kong?

The answer is in the article link and I quote: "The decision to list Manchester United in Singapore crystallizes Asia's importance as a growth area for the debt-laden Premier League soccer club. Manchester United says almost two-thirds of its 300 million followers live in Asia, and the club has negotiated a series of commercial deals in recent years to exploit its brand in the region." (emphasis mine)

Apparently London and Hong Kong has stricter rule regarding the listing of unprofitable companies. I was under the impression that listing on the Mainboard requires the same rules.

So I can think of 2 possibilities - the restructuring of Man U into a business trust ala HPH; or it get listed on Catalyst. If its the latter, it would be the world's largest listing on a secondary board.

[kazukirai]

For Buddies who missed the local ver. of the same news. (link here)

And the paras I thought was most telling...

With nearly two-thirds of its 300 million fans in Asia, the region has become an important growth area for the loss-making Manchester United. Earlier this month, the United Kingdom's Sunday Mirror reported the Glazer family, which controls the club, was looking to sell as much as 25 per cent in an IPO.

Despite mounting talk of a Hong Kong offering, the territory bars unprofitable companies from listing on its exchange. Singapore is more liberal in this respect. The IPO of a globally recognised brand such as Manchester United would be a coup for Singapore, which has been competing with Hong Kong for international listings.

Our competitive advantage is having more lax standards.

[lonewolf]

I went to check out SGX's mainboard listing requirements and there are 3 criteria which a company may seek admission. 2 of them requires the company to have pre-tax profits. ( Link here )

Criteria 3 only requires the company to have a market capitalisation of at least $80 million at the time of the initial public offering, based on the issue price. So this will be how Man U will get its listing.

[yeokiwi]

I wonder how they valuate the legs of their footballers..haha..
"we have 50 pairs of legs, average valuation is 10 million per pair"

http://online.wsj.com/article/SB10001424...35344.html

You've got the replica shirt, now buy the shares. That may be Manchester United's pitch if the U.K.'s leading soccer team pursues plans to raise up to $1 billion through an initial public offering in Singapore. With two-thirds of its global fan base based in Asia, looking East to raise capital is an understandable move by United's American owners, the Glazer family. But investor faith in United shouldn't be as blind as that of its fans.

Few top U.K. soccer teams are profitable, and Manchester United, despite winning the English Premier League in 12 of the last 19 seasons, is no exception. The club's real problem is its near $1 billion of net debt. In 2010, the company earned $47 million before interest and tax, but its interest expense was $119 million according to its financial statements. That interest cost included $50 million of interest accumulated on payment-in-kind loans that bear a 14.25% annual rate.

Asian investors, attracted to the United brand, may support the offering anyway as they have with other big brands, such as Prada's Hong Kong flotation in May. Still, the Glazers paid 4.6 times annual revenue when they bought United in 2005, according to Deloitte's Sports Group. A similar ratio now would value the team at around $2.3 billion. That is substantially more than the $1.8 billion a group of investors, including Goldman Sachs's Jim O'Neill, were willing to pay for Manchester United last year.

Sure, United's revenues, based on television rights and ticket sales, look solid enough. But with massive player costs—accounting for 46% of revenue —and a heavy debt burden, even a listing in soccer-mad Southeast Asia would be no open goal.

[FA+TA]

The potential Man U investors unlikely to be valuebuddies. If he is, he should be the die-hard fans. Die die also Man U.