USA: SOCCER/FOOTBALL: With the Manchester United IPO priced $2 (USD) below bottom end of expected range, the stock opens five cents higher, then eases after debut

Record ID: 336437

  • Title: USA: SOCCER/FOOTBALL: With the Manchester United IPO priced $2 (USD) below bottom end of expected range, the stock opens five cents higher, then eases after debut
  • Date: 10th August 2012
  • Summary: MANCHESTER, ENGLAND, UNITED KINGDOM (FILE - FEBRUARY 2012) (REUTERS) VARIOUS OF MANCHESTER UNITED PLAYERS PRACTICING
  • Embargoed: 25th August 2012 13:00
  • Keywords:
  • Location: United Kingdom
  • Country: United Kingdom
  • Topics: Finance,Sports
  • Reuters ID: LVA85C2ZITNPZ7GHO6X10UJH5PAL
  • Story Text: Wall Street was transformed to a makeshift soccer field Friday (August 10) as British team Manchester United made its debut on the New York Stock Exchange.
    But the share price of the Manchester United IPO was cut after a flotation that has disappointed the English soccer club's American owners and enraged some of its fans.
    Shares in Manchester United, which is considered the most famous soccer club and most valuable sporting team, priced below expectations and were essentially flat in early trading.
    Manchester United sold 16.7 million shares as planned, but at a price of $14 (USD) each, below the expected range of $16 to $20.
    Before ringing the opening bell, CEO David Gill said breaking into the American market was an "attractive opportunity."
    At 10:45 a.m. ET (1445 GMT) shares were up 2 cents at $14.02, with turnover having tapered off sharply following an initial surge. Shares never dipped below $14 and were mostly steady within the initial five-cent range.
    One of the club's top officials said the team took less money than planned because it preferred the mix of investors involved at the lower price.
    A mystery to most Americans but a household name in most of the world, the club listed on a U.S. exchange after pulling a planned IPO in Singapore earlier this year.
    Gill said the rising popularity of the sport in the U.S. made the market a natural fit for the club.

    "We've got many partners in the U.S. already, Aon, Nike etc. we just signed Chevrolet so that will help us and I think soccer as a sport is generally the fastest growing sport in America. We've played MLSD since we've been over here and we're very much looking forward to furthering our business in America," Gill said.
    The offering valued the 19-times English champions at $2.3 billion but shaved as much as $100 million off the proceeds that had been expected for the team and its owners.
    The $233 million (USD) ultimately raised in the IPO will be split equally between the 134-year-old club and its owners, the Florida-based Glazer family, owners of the Tampa Bay Buccaneers NFL team among other interests.
    The loss of as much as $50 million in expected proceeds for the club will be a blow as it copes with a heavy debt burden and seeks to buy new players, who cost tens of millions of dollars each. United had debt of 423 million pounds ($661 million USD) at the end of March.
    The Glazers bought United for 790 million pounds ($971 million USD) in a highly leveraged deal in 2005, taking it private after 14 years on the London Stock Exchange.
    Some fans argue that the cost of the debt has forced up ticket prices for the club, which draws sellout crowds of around 76,000 at its Old Trafford Stadium and claims 659 million followers across the world.
    Forbes still ranks 134-year-old United as the world's most valuable sports team by a wide margin, part of the attraction for the American owners in the first place.
    Soccer is the world's most popular sport, but the setback for the initial public offering underlines the limited appeal of even its biggest names for investors.
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