Manchester United Seeks Singapore IPO

[Nick]

I think it will be a good move if United is selling new stock. The cash raised will be sufficient to repay its US$500 million bonds thereby ending the need to make extremely high interest repayment. Man United was a pretty profitable company with pretty decent dividend track record -

Dividend History

FY 01: 2.00 p
FY 02: 3.10 p
FY 03: 4.00 p
FY 04: 2.65 p
FY 05: 1.325 p (only interim dividend as it was privatized)

Info: http://www.northcote.co.uk/company_links...DL=NI01813

I am not sure whether I will purchase United stock but as a fan, I hope they get rid of the debts. Those debts are not part of United business - they were dumped in by Glazer when he did a leveraged buy-out of the Club in 2005.

[yeokiwi]

This soccer business is highly affected by soccer hobbyists.
Roman Abramovich
different kind of sheiks from middle east
socios or club members operating mode (Real madrid, barcelona)

Since these hobbyists only wants to win at all costs(even by losing lots of money), it is a matter of time that any good club will be hard pressed to match their spendings.

[Musicwhiz]

The Straits Times
Aug 21, 2011
How Singapore managed to score Manchester United listing
News of Man Utd's listing here sparked a frenzy last week. Robin Chan and Magdalen Ng piece together how Singapore snatched the Red Devils from under the nose of Hong Kong.

The story of Manchester United's US$1 billion (S$1.2 billion) initial public offering (IPO) starts with its billionaire owner Malcolm Glazer, who had been looking for ways to erase his mounting debt.

The world's most famous football club may be on a winning streak on the pitch, but its owner was losing the battle against its finances.

Short on cash, Mr Glazer had completed a successful £504 million bond issue early last year, but despite that, by the end of March this year £478 million (S$952 million) of debt had piled up.

It was well known that the Glazers were looking at other ways to service their debt, and the idea of a partial listing of shares on a stock exchange came up.

Early this year, when it seemed that the global economy was back on a steady footing, the Glazers looked at the proposal in earnest and hired investment bank Credit Suisse.

There was no shortage of takers for the football club ranked by business magazine Forbes as the world's most valuable, at US$1.86 billion, and the second most valuable sports brand in the world.

The listing destination was whittled down to three markets: London, Hong Kong and Singapore.

Credit Suisse and the Glazers met exchange officials from all three markets, making several visits to Singapore.

With the huge fan base in Asia, of 190 million out of an estimated 330 million worldwide, and a buoyant regional economy, Asia seemed the better bet.

But between Hong Kong and Singapore, both the Swiss investment bank and the American billionaire preferred the former.

A globally renowned stock exchange with huge retail interest and big brand name listings that include HSBC and Prada, Hong Kong was 'the path of least resistance', said one person with knowledge of the deal process.

'The bankers were quite dismissive of Singapore from the beginning,' he added.

It appeared to be a done deal. Hong Kong would add the Manchester United IPO to its lengthening string of successes.

But Singapore Exchange (SGX) chief executive Magnus Bocker and his team had other ideas.

They had, after all, seized a plum listing of the Hutchison Port Holdings Trust from its own Hong Kong home market earlier this year, bagging the biggest listings deal, at US$5.5 billion, in the first quarter.

Also, while SGX may have failed to buy the Australian Securities Exchange as a result of political opposition, the indefatigable Mr Bocker felt the audacious bid had put Singapore firmly on the global map.

Days before Manchester United was to submit an application for a listing on the Hong Kong Stock Exchange (HKex), they were intercepted.

Having sent feelers through their international offices, Mr Bocker and his team flew out to meet the Glazer family and make a last ditch attempt to change their minds.

Somehow, they succeeded.

'On reviewing facts, the Glazers believed Singapore had a superior pitch,' said a person involved in the deal.

'There was a train that was clearly heading for Hong Kong and that filing was supposed to be done about two to three Mondays ago,' confirmed another source.

'That is the strength of the coup for Singapore as a whole.'

Once the decision was made, an application was put in for a listing last week, setting off a scramble by other banks to get a piece of the pie.

The exact contents of the SGX pitch are unclear.

But the challenge for SGX was to clear the misconceptions about Singapore being a small and domestic-focused market.

One source said: 'Once they got their foot in the door, they merely presented the facts.'

Among them: that trading on the SGX is highly liquid and that the exchange has an international presence with 56 per cent of its revenue from outside of Singapore.

In fact, the claim was that Singapore would offer a wider base of international investors than Hong Kong, which is more closely associated with the Chinese market.

A senior banker who had been involved in pitching for a role in the deal said that the SGX also argued that the IPO would attract not just Singapore investors, but wealthy individuals from South-east Asia too.

Singapore, as a growing private banking hub for the region, would be a suitable place to market their shares from, he added.

'Tony Fernandes (of AirAsia) recently bought Queens Park Rangers,' said the banker.

'There are a lot of wealthy football fans out here.'

In fact, the Glazers may have also met various potential 'cornerstone' investors in the region, including Singapore investment firm Temasek Holdings.

Billionaire Peter Lim could also be interested in becoming a cornerstone investor. He is a diehard Manchester United fan with regular VIP box seats at Old Trafford, and has built up a close friendship with Mr David Gill, chief executive of Manchester United. Last month, the two met in Singapore to support Mr Lim's sports scholarship.

Another factor in Singapore's favour was that Manchester United's slate of global sponsors are also largely Asian, or are companies which have a large Asian presence.

It is believed the Glazers could have seen Singapore as a more appealing place from which to attract such global sponsorship, because there are more multi-national corporations headquartered here than in Hong Kong.

Since news of the Singapore deal emerged, however, various reports in the Hong Kong press have painted it as a matter of the HKex rejecting Manchester United.

An Apple Daily report said that the HKex deal stumbled because the Glazers wanted to keep decisions over player transfers out of shareholders hands, and also wanted to keep details of player salaries private.

Star forward Wayne Rooney, for example, is believed to be paid as much as £160,000 a week.

The Glazers also wanted to introduce a 'poison pill' clause to prevent a hostile takeover bid for the football club.

Apparently, Hong Kong would not budge on these demands, the report said.

But a source with knowledge of the SGX pitch claims these demands were not made.

Another story making the rounds is that HKex did not want to list a loss-making firm.

Manchester United made an overall loss of £84 million in the 2010 financial year because of huge interest payments on its debt, despite an operating profit of £101 million.

Debunking this, Ms Rachel Eng, managing partner at WongPartnership, a local law firm that specialises in IPOs, said: 'Both sets of rules (in Hong Kong and Singapore) technically permit the listing of loss-making companies.

'I do not think one should jump to the conclusion that Manchester United is not able to list in HKex just because it has a negative bottom line.'

Lawyer Raymond Tong, partner at Clifford Chance, said neither of the listing regimes is 'better than the other'.

It is understood, however, that the SGX was probably willing to give special concessions to the club, including an accelerated listing process.

But while the club appears on track for an early listing in October, with pre-marketing next month to gauge investor interest and come up with a price range, there are still uncertainties clouding the picture.

For one thing, commentators are sceptical about the US$1 billion valuation of what will be an approximately 30 per cent share.

A volatile market could also still put off this headline-grabbing deal.

To increase its chances of success, a long list of banks has been carefully chosen, to help market shares around the region.

The list includes Credit Suisse as the sole global coordinator and JPMorgan Chase and Morgan Stanley as joint bookrunners.

Co-lead arrangers are China's BOC International, Hong Kong's CLSA Asia-Pacific Markets, Malaysia's CIMB and Singapore's DBS.

It has been a riveting few weeks for SGX officials, bankers and sports fans here. And if there is a lesson to be learnt from all of this, it is that - just like in football - always play to the final whistle.

chanckr@sph.com.sg

songyuan@sph.com.sg

[brattzz]

If peter lim throws in 500Milos.. enough liao..

[Musicwhiz]

Business Times - 29 Aug 2011

Man U may rely on Asian fan support in S'pore IPO

(LONDON) Manchester United may rely on Asian fans buying shares with their hearts, rather than their heads, as the 19-time English soccer champion plans a US$1 billion initial public offering in Singapore.

Analysts and fans say the sale of as much as 30 per cent of the club may tempt retail investors with affection for United as opposed to institutions. The US-based Glazers bought United for £790 million (S$1.5 billion) in 2005. The proposed IPO implies a value of more than US$3 billion. The owners will use the proceeds to cut debt and invest in players, said two people with knowledge of the decision. The club hasn't confirmed the plan.

'I would be more inclined towards investing in the club, even if valuations are slightly on the high side, because of my emotional connection with it,' said David Hu, a 25-year-old financial analyst based in Singapore and a United fan since he was 10. 'It's exciting to own a material interest in a team you've supported for so long.'

The team, which will gauge investor demand as soon as next month, decided to list in Asia because of its fanbase there, according to the people familiar with the discussions. United spokesman Philip Townsend declined to comment on that.

United says it has more supporters than any soccer team, with 190 million of the estimated 330 million 'Reds' living in Asia. The team's popularity has climbed with the increase in global demand for Premier League soccer, which is now televised in 211 territories.

The Glazers have doubled revenue to about £300 million since a debt-funded takeover that made them unpopular with many fans. Interest costs from the acquisition meant the team was profitable only once in the past five years, thanks to the record £80 million sale of Cristiano Ronaldo to Real Madrid in 2009.

In an IPO, 'my sense is the investor base is going to be less institutional', said Philip Hall, a partner at New York-based Inner Circle Sports, who advised on the takeovers of Liverpool and Sunderland. 'It's more likely people will invest from a retail perspective so they can say 'I own 200 shares of Manchester United.' It's like buying the ultimate piece of merchandise.'

United announced a four-year deal on Aug 22 that allows delivery company DHL to put its name on training wear. The contract is worth about £40 million, said two people with knowledge of the negotiations. Malaysian snack Mister Potato and Vietnam telecommunications company Beeline also joined as sponsors last week.

The DHL deal is bigger than principal jersey contracts held by most in the 20-team league. Only Liverpool, Chelsea, Tottenham and Manchester City make more. Insurer Aon Corp pays about £pounds;80 million to advertise on United's shirt.

Stephen Schechter, chief executive officer of Schechter & Co, an adviser to other teams that sold shares to the public, places the value of United at closer to US$2 billion. Forbes magazine said it's worth US$1.86 billion.

The figures quoted for the IPO are too high 'because of the massive debt burden, the massive payroll, and the need to replace certain ageing players', Mr Schechter said.

United first toured Asia four decades ago and plans to go again next year. When the club last made the trip, the players were mobbed by supporters wearing replica shirts bearing names of stars like Wayne Rooney and Ryan Giggs.

'Manchester United has got the heritage and also the current form on the field,' said brand consultant Nigel Currie. 'Asian fan-bases are quite changeable in terms of their support habits. Manchester United has maintained their success.'

European champion Barcelona and Real Madrid also are popular in Asia, while Liverpool and Chelsea attracted thousands to matches. That prompted Felomina Devaraj Rulloda, who owns licensing rights to a United-themed restaurant in Singapore, to change the name to Charlie's Tapas Grill & Bar from Manchester United Cafe because it was deterring fans of other clubs. -- Bloomberg

[Nick]

Manchester United Listing Will Have Dual-Share Structure

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

Vested as a fan !

[Jared Seah]

This Magnus Bocker and his team at SGX are bringing a breath of fresh air to SGX. Very interesting!

Despite the failed ASX merger, he showed he dared to dream big! Not fall into the parochial trap... Introduced all day continuous trading from 9 to 5, changed the bid and sell spreads, and generally pissed-off a lot of industry players who just want to stay within the comfort of "status-quo".

I am still tickled pink that HPT was listed here - it's the equivalent of our GIC or Temasek company listing in HK, not Singapore. LOL!

After Man U, we just need to keep the momentum to attract other overseas big cap potentials to list here in SGX.

One big listing is worth many of those small and "guchingkurat" china chips... Value investors not impressed with HPT or Man U? Don't have to buy during IPO. Wait for them to drop after IPO until value emerges. Isn't that the point of financial literacy?

Anyway, no underwritter will list in SGX if they not confident most of the IPO will be supported by institutional investors. Retail tranche is more for PR and keeping with SGX rules. If retail tranche is bigger than institutional tranche, it's a warning sign to me...

No vested interest in SGX yet (buy finger very itchy).

Just a pissed-off proud Singaporean who hates it that SGX is not considered one of the major Asian stock markets by most international media if you check on TV or internet under "Asian indices".

[Musicwhiz]

Business Times - 03 Sep 2011

Is SGX doing a deal with the (Red) Devil?

Unclear if SGX has permitted dual-class shares but it has fast-tracked IPO application

By MICHELLE QUAH

THE Singapore Exchange (SGX) looks set to score a double with the potential listing of Manchester United, so soon after that of Hutchison Port Holdings Trust.

But, before it can hold the trophy aloft, SGX has to be careful not to trip on the long red carpet that it has rolled out for one of the best-known football teams in the world - and deal with allegations that it may have conceded too much in its eagerness to lure the Red Devils.

Viewed positively, its so-called concessions can be seen as an indication of SGX's ability to be flexible in its dealings. But it could also be seen as a relaxation of corporate governance standards - which will have implications for the SGX's standing as a regulator.

At the heart of the debate is a Wall Street Journal report which said that the UK soccer giant 'chose Singapore as the destination for its US$1 billion initial public offering (IPO) so it could have a dual-share structure - one with voting rights and one without - that enables its owners to effectively retain control of the team'.

That sparked a letter to The Business Times from corporate governance advocate and accounting professor Mak Yuen Teen, who asked SGX to clarify if it is allowing Man U to list here with a dual-class share structure and, if this is the case, what safeguards it will have to ensure that minority shareholders' interests are adequately protected.

'There are good reasons not to allow a dual-class share structure as it enables certain shareholders to exercise a degree of control that is greater than their investment in the company,' he said.

The SGX, in response, said: 'We wish to point out that Singapore's current policy does not allow listed companies to issue ordinary shares with different voting rights. The Singapore framework permits the listing of voting ordinary shares (which entitle the holder to one vote per share) and companies can also issue non-voting preference shares, as practised in most developed jurisdictions.'

Which means what, exactly?

It seems to suggest that the SGX is pointing out the known fact that the Companies Act, in its present form, specifically prohibits two classes of shares. Section 64 (1) of the Act states that 'each equity share issued by such a company after 29th December 1967 shall confer the right at a poll at any general meeting of the company to one vote, and to one vote only, in respect of each equity share'.

However, the Companies Act applies only to companies incorporated in Singapore. Those incorporated elsewhere are subject to different rules.

What is unsaid in the SGX's reply - and, hence, not dealt with - is how it will deal with companies incorporated in jurisdictions that do allow a dual-class structure.

A company like Man U would be governed by the UK Companies Act, which does not expressly prohibit dual-class shares, as the Singapore Companies Act does. UK's Financial Services Authority, in fact, allows dual-class listings as long as their status is clearly disclosed in any IPO.

As Prof Mak pointed out in his letter, 'If it is indeed true that Manchester United is listing in Singapore because it is able to have a dual-class share structure, it must be because it is incorporated or will reincorporate in a jurisdiction where the corporate laws allow public companies to have such a share structure' - a point which was not addressed by the SGX in its reply.

What the SGX did say was this: 'As a frontline regulator, the Singapore Exchange (SGX) advocates that practical regulation and effective enforcement remain pivotal for an enduring marketplace. We regularly review the efficacy of our rules as part of our commitment to benchmark against global developments and enhance our practices, where appropriate.'

Does it suggest that SGX is prepared to be flexible in how it applies its rules - possibly looking to certain practices elsewhere in the world as a guide? Dual-class listings are allowed in the United States and Tokyo, and are common in European countries such as the Netherlands, Sweden and Switzerland.

Should the SGX decide to take a leaf from their books, the concerns are twofold: one, dual-class shares are viewed as tipping the balance of power away from minority shareholders; two, it suggests a willingness on the part of SGX to make exceptions for 'star' listings.

First, the corporate governance concerns rendered by dual-class structures. Some will remember how the former CEO of American newspaper publisher Hollinger International (now known as Sun-Times Media Group), Conrad Black, abused his greater voting powers by taking huge management fees, consulting payments and personal dividends.

In Man U's case, should a dual-class structure be effected, it would vest power in the club's owners, ie the Glazers, also regarded by many as the folks who saddled the Red Devils with over £700 million (S$1.4 billion)in debt - a fact which promoted then-UK Prime Minister Gordon Brown to warn clubs about their 'too high' debts.

Second concern: what it says about SGX. While the possibility that it has permitted a dual-class arrangement is unclear, it is undisputed that the SGX has already fast-tracked Man U's IPO application - having promised to approve the English Premier League champs' IPO in just four weeks, when Singapore listings typically take between four and 12 weeks to take off.

It raises the worrying spectre that special treatments could be dished out at will in future - an opening of the floodgates, if you will - every time that SGX hopes to secure a 'desirable' listing.

Until June, the Wall Street Journal reported, Hong Kong was the favoured listing destination for Man U's IPO. But, according to its sources, the Hong Kong Stock Exchange (HKEx) banned dual-share listings in 1991 and refused to give Man U a waiver.

The SGX's rivalry with HKEx is well-known. Hong Kong has secured about three times the value of listings than Singapore in this year alone, and SGX is keen to catch up.

For this reason, some have said that SGX is 'desperate' to reel in the big listings - and, as an Arsenal fan, I understand the true meaning of the word.

But, even then, we Gunners are not about to shoot ourselves in the foot - which is what would be the case for Singapore's corporate governance standards, and its minority shareholders, if SGX was to begin making such concessions. We need to score, but also defend well.

[pianist]

sounds like the same issues for dual citizenship

[Musicwhiz]

The Straits Times
Sep 4, 2011
your letters
Don't cheer yet for Man U listing

Those who are a little longer in the tooth and have experienced vicissitudes in stock market movements in earlier times may not readily subscribe to the euphoric article ('How Singapore managed to score Manchester United listing'; Aug 21).

The present sombre mood in stock markets worldwide is not particularly conducive to the promotion of initial public offerings (IPOs) in general.

Investment in stocks presupposes a return/dividend on capital. What such promise is there for subscribers to a cash-strapped enterprise that successfully raised £504million (S$985million) just last year and piled up £478 million further debt by the end of March this year, and is now again coming cap in hand for another US$1billion (S$1.2 billion)?

It may be a trifle over-optimistic to rely on its 190 million fans in Asia and 330 million worldwide to subscribe for shares.

Given the fierce battle for supremacy and one-upmanship between the Singapore and Hong Kong exchanges, it is understandable that each seeks to advance its own (and different) version for the eventual decision favouring a listing in Singapore over Hong Kong.

The article mentioned that the Singapore Exchange (SGX) 'seized a plum listing of the Hutchison Port Holdings Trust from its own Hong Kong home market earlier this year'.

It may well have been a 'plum' for its promoters and all others associated with that IPO, SGX included, but considering that its market price has since plummeted 40per cent, and all too literally 'listed', in these three months, it must be a 'sour plum' for the initial subscribers.

Astronomical payments of £160,000 a week for a Manchester United star forward may not raise many eyebrows in Singapore, but this makes some wonder how much more is needed to run the entire ship, and what would eventually remain for shareholders.

'Caveat emptor' is the accepted maxim for those entering the stock market. It extends to IPOs as well, no matter how branded the offered product is.

Narayana Narayana