Manchester United IPO: Mixed reactions for Wall Street debut
Manchester United, the 134-year-old English Premier League soccer club, will set a price later today for its initial public offering on the New York Stock Exchange on Friday.
The club needs to raise capital to reduce its debt load after American billionaire Michael Glazer and his family finished taking controlling interest in 2005. Forbes lists the club’s worth at $2.2 billion, tops in the sports world.
Stock experts say the IPO will be set from $16 to $20 a share. And, they add, that might be too high. More than 16 million shares will be available, 8 million from the club and another 8.3 million from another major shareholder, according to reports.
The soccer club has more than 300 million fans and is hoping to raise more than a quarter-billion dollars with the IPO.
But this is a buyer-beware deal. The Glazer family’s shares will hold 10 times more voting power -- still leaving them with complete control of the club -- and many experts believe the shares are overvalued.
“We see good growth potential in the business ... but we believe the mid-point of the IPO valuation range overstates the economic opportunity,” said Morningstar, an investment research company.
In other words, fans can claim a share of the team but they might never see a share of the profits.
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