Glazers’ dual track IPO gets green light



The Glazer family will list Manchester United on the Singapore Stock Exchange (SGX) this autumn after local authorities gave the American family a green light for the partial IPO. The family will sell off around a third of United’s shares in a much-discussed dual track listing that will raise money but ensure the Glazers remain in Old Trafford control. Amid speculation over pricing, with the family seeking around £600 million for a 25 – 35 per cent listing, United could float by mid-October if the Glazers drum up enough local interest.

Yet, with controversy surrounding the dual track nature of the shares being offered – investors will be required to purchase non-voting preference shares in addition to ordinary stock – many questions remain about the IPO’s potential success. Not least just how attractive the Glazer family will make preference share dividends for investors who will have little influence on the club’s future strategic direction.

“They have received approval but the timetable is not fixed,” a ‘source’ close to the IPO told newswire AFP on Friday.

“The company is not in need of funds so they are not in a hurry to list. Basically, they are keeping a watching brief on market conditions. Now that there is approval, they can roll out any time.”

The SGX go ahead will allow United to open formal talks with potential anchor investors, while a prospectus and tour are likely in the coming weeks. The club is believed to have already held informal discussions with investment company Temasek Holdings, which is owned by the Government of Singapore.

SGX’s go-ahead comes amid fresh speculation in the Mirror that the Qatari Royal family is prepared to offer £1.6 billion for total acquisition of the club. In reality United may approach the Qatari’s to take a significant, if minority, shareholding on flotation, with the Glazers now convinced IPO will maximise the family’s profits. Full sale is surely likely only if the IPO gravy-train fails in the coming weeks. After all, with the eurozone debt crisis showing no signs of abating, markets globally have become twitchy about new listings.

However, Qatar is making significant noises in the football market, having won the right to host the 2022 World Cup finals, while members of the Royal family has invested in Malaga and French Paris St Germain. The Qatari Foundation struck a record-breaking shirt sponsorship with Barcelona last season.

“The Mirror understands that a delegation from the Qatari royal family, headed by Sheikh Hamad bin Khalifa Al Thani, will be in Manchester on Monday in a bid to conclude the deal,” said the paper on Friday.

“Top Middle East sources revealed last night that an official approach to the Glazer family is being made and a deal could even be clinched by next week. The super-rich Qataris think United is a good deal – even at the profit it would make for the current rulers.”

Doubts remain about the IPO’s potential for success, with the family seeking to retain around 90 per cent control on flotation. The dual track listing means each ordinary share will be sold with a preference share. While preference shares hold no voting rights they will attract higher dividends and first option of repayment in the unlikely event that United is made insolvent. In practice this means that post-IPO United is likely to pay out higher annual dividends than if the Glazer family went for a standard listing.

“Football clubs around the world are mostly quite closely held and not very transparent,” Pearlyn Wong at Bank Julius Baer & Co., told Bloomberg on Friday.

“They don’t like to give up voting rights so they can make faster decisions over things like players and management. Usually preference shares come as a follow-up offering, rather than at the IPO stage. Whether people will receive the share structure well depends on how much dividends they can get and whether the company has the cashflows to support it.”

United recently reported annual pre-tax and interest (EBITDA) earnings of £110.9 million for the year to the end of June 2011, with a pre-tax headline profit of £29.7 million. However, the club currently pays around £45 million per season in interest on bond debt, although it spent more than £60 million in the past financial year buying back some of the notes. United has spent more than £470 million on interest, debt repayment and related fees during the course of the Glazer family’s six-year tenure at Old Trafford.

Another senior analyst told Bloomberg that “institutional investors are unlikely to be interested [because] the lack of voting rights is just a kick in the teeth,” raising the spectre that the Glazers will sell United’s brand to retail investors. It is not a community that traditionally has a strong voice in the Singapore market.

The doubts place into question the IPO timescale, which could now happen at any point but is likely to go ahead – if at all – when the Glazer family believes the market is most receptive. Moreover, the family’s oft-reported $4 billion asking price – a significant premium by any measure – will be tested by a genuine market valuation for the first time.

Then there is the question about just how much debt the IPO will enable United to repay. After all, the dual listing has a significant impact on this process, with ordinary share sales diluting the family’s holding and raising money for the Glazers directly, and preference shares raising money for the club.

Photo credit: Flickr/NickD58

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  • dws

    greedy fuckin bastards, I hope the IPO fall flat and they are in just as much deep shit as ever. No chance of this happening but hope springs eternal. NEVER EVER forget the only thing the scumbag glazers will do will be for their own interest and screw Manchester United. They would sell Old trafford tomorrow if the price was right. LUHG

  • vlad

    There is strong expectation of another wave of global financial crisis – Glazers are probably just cushioning themselves.

    BTW, is there any notice of whether this IPO means issuance of new equity shares – so the total share capital increases – or selling Glazers’ own shares?

    Still, if i had a channel i would have bought smth at least.

    • http://www.unitedrant.co.uk/forum/profile/admin Ed

      Vlad – seems like the plan is a bit if both. New equity and old, minimal dilution of Glazers’ stock or power.

  • sidney

    Look right, would it just be easier if me and Alf took a couple of the ginger cunts out?

    Between the two of us I reckon we could have them hanging by their necks from the top of the Hilton in a couple of days

  • Twisted Blood

    Ed:

    Informative article. I enjoy United Rant, both the site and the Rantcast. I realize there’s an anti-Glazer spin to most articles but the rhetoric is getting waaaaaay out of hand. As a moderator, can you do anything about comments like the one above? I don’t enjoy reading death threats about anyone on the site nor do I like the idea that the Rant would host comments like that.

    • ja

      Grow a pair, the Glazers are scum that ought to roast in hell

  • Alfonso Bedoya

    “Badges, to god-damned hell with badges! We have no badges. In fact, we don’t need badges. I don’t have to show you any stinking badges, you god-damned cabrón and ching’ tu madre! Come out from that shit-hole of yours. I have to speak to you.”

  • captainhormone

    Commenter said:
    Ed: As a moderator, can you do anything about comments like the one above? I don’t enjoy reading death threats about anyone on the site nor do I like the idea that the Rant would host comments like that.

    I agree…terrible to say things like that

    Make it Alf, Sid, Captain, Han and Ed take the ginger cunts out

    Better???

  • reddread

    Ginger?

    Only a ginger can call another ginger ginger. Do you not know the rules? Ignorant cunts…

  • captainhormone

    you are more of a strawberry blonde j….

  • reddread

    Ner, mate. Ginger (hard g’s) and proud! Love how Sid’s all left wing and shit, except for the gays and the gingers, as they don’t count.

    http://www.youtube.com/watch?v=f0IVuGK7sAw&feature=youtube_gdata_player

  • han

    Commenter said:
    Ed:

    Informative article. I enjoy United Rant, both the site and the Rantcast. I realize there’s an anti-Glazer spin to most articles but the rhetoric is getting waaaaaay out of hand. As a moderator, can you do anything about comments like the one above? I don’t enjoy reading death threats about anyone on the site nor do I like the idea that the Rant would host comments like that.

    aye well said
    btw whats your address?

  • captainhormone

    reddread said:
    Ner, mate. Ginger (hard g’s) and proud! Love how Sid’s all left wing and shit, except for the gays and the gingers, as they don’t count.

    http://www.youtube.com/watch?v=f0IVuGK7sAw&feature=youtube_gdata_player

    my youngest is a proper ginger too….little man is ace….proper nutter as well

    its the irish in him, from his mothers side…lunatic gene

  • sidney

    reddread said:
    Ner, mate. Ginger (hard g’s) and proud! Love how Sid’s all left wing and shit, except for the gays and the gingers, as they don’t count.

    http://www.youtube.com/watch?v=f0IVuGK7sAw&feature=youtube_gdata_player

    By benders I mean your typical middle class nomark cunts, usually from North London or a village. Not actual gay people. That’s why I use the word bender, not gay

    On gingers, you got me. But then you hold me to some kind of lefty stereotype when I aren’t a lefty

    Fuck Tim Minchin n all. He charged £290 quid for a ticket at the O2. Alternative comedy. Yeah

  • brianofnazareth

    Commenter said:
    Ed:

    Informative article. I enjoy United Rant, both the site and the Rantcast. I realize there’s an anti-Glazer spin to most articles but the rhetoric is getting waaaaaay out of hand. As a moderator, can you do anything about comments like the one above? I don’t enjoy reading death threats about anyone on the site nor do I like the idea that the Rant would host comments like that.

    I wholeheartedly concur my good man.

    May they all rot in a cesspit of evil in hell.

    P.S

    Have you NEVER read Rant before?? Cunt.

  • brianofnazareth

    captainhormone said:
    I agree…terrible to say things like that

    Make it Alf, Sid, Captain, Han and Ed take the ginger cunts out

    Better???

    No mention of me? I’m hurt.

  • captainhormone

    ….and brian too

  • http://www.unitedrant.co.uk/forum/profile/admin Ed

    Commenter said:
    Ed:

    Informative article. I enjoy United Rant, both the site and the Rantcast. I realize there’s an anti-Glazer spin to most articles but the rhetoric is getting waaaaaay out of hand. As a moderator, can you do anything about comments like the one above? I don’t enjoy reading death threats about anyone on the site nor do I like the idea that the Rant would host comments like that.

    I’ll look into it… this is a semi-moderated website/forum. Users who have posted acceptable comments in the past can post unmoderated. First time commenters are always held in a queue. I’d also say this: taken without context the comment sounds like a death threat. Taken in the context of the Rant Forum I suspect it is a flippant comment with tongue firmly in cheek. Sidney, care to explain…

    Editor & Moderator at http://www.unitedrant.co.uk
  • brianofnazareth

    captainhormone said:
    ….and brian too

    Meh….not the same now.

  • han

    brianofnazareth said:
    Meh….not the same now.

    ungrateful cunt
    shove it up him hard cap’n
    that’ll learn him

  • uncleknobheadforfucksake

    ohffs what’s han posting for

    its not a matchday

    fuck off

  • han

    uncleknobheadforfucksake said:
    ohffs what’s han posting for

    its not a matchday

    fuck off

    its comments like that that make my day
    so nice to see u care so much about me
    i know u have a secret hot spot for me
    so i’ll stop teasing u ….

  • captainhormone

    LKHF

    I’d die for uncleknobheadffs

  • han

    captainhormone said:
    LKHF

    I’d open my cheeks for uncleknobheadffs

    1 day u may have to
    but not yet
    not yet…

  • uncleknobheadforfucksake

    lkhf aka knobcap

    posting tyranny

  • captainhormone

    uncleknobheadforfucksake said:
    lkhf aka knobcap

    posting tyranny

    *Pumps chest out and punches it like proper man in respect to knobhead*

    knobcap

  • sheesh

    Blackburn and Everton are £500m targets for Arab sheikh

    Nov 13 2011 by Mick Walsh, The People

    the mega-rich crown prince of Qatar is back in the market for a Premier League club after *giving up on Manchester United.

    And with £500million to spend, he has fixed his sights on *strugglers Everton and Blackburn Rovers.

    Sheikh Tamim bin Hamad Al-Thani, heir to the throne of Qatar, had been *bidding to buy United.

    But he decided that the asking price of around £2billion was too much – with Old Trafford’s *controlling Glazer family in no mood to do business.

    Now People Sport can reveal that the prince’s representatives, both in Qatar and working with *influential figures in England, have been *investigating Everton and Blackburn as their latest ‘projects’.

    The prince’s company already has a major stake in French outfit Paris Saint-Germain and there are family ties with Spanish side Malaga.

    Now he wants a Premier League club to buy and stock with stars.

    A top Arab source revealed: “The sheikh had his heart set on *Manchester Untied, but now he knows he must go *elsewhere and find a club – perhaps to prove a point.

    “There is a budget set aside to buy a club, but it has to be right. They want to spend most of the money on players to reach the Champions League.

    “This is a plan to get Qatar high profile in the best league in the world.

    “Although *money is no object, they will not be ripped off.”

    United’s loss could be a rival club’s gain as the amount of cash being spoken about could transform a smaller club into top-four contenders – and raise the stakes at the summit of the table.Everton are up for sale at the right price, with interest *being shown by the Indian-based Jain Group, but the valuation is putting off Al-Thani.

    A leading football power broker has been working on the deal in recent weeks, but it is proving a tough nut to crack *because the *numbers do not appeal to the Arabs.

    Bill Kenwright is looking for around £120m for Everton, although that price is negotiable. The Toffees are carrying debts and there will be a massive bill if the buyer wants to build a new ground.

    Instead, bizarrely, Blackburn have emerged as an option – with insiders *claiming the Qataris have been to Lancashire and India in the past week.

    Rovers were bought by the Venky’s Group a year ago, but the Indians have suffered problems – with results on the field and their image off it.

    Face

    If the Qataris could buy Rovers at the Venky’s purchase price, and inherit their debt, it would leave an unbelievable *amount of cash for new players.

    However, sources at Ewood Park claim that not even a whacking profit would make the Rao family walk away now.

    They have invested heavily in making Blackburn ‘India’s Premier League club’ and they do not want to lose face.

    Word of the potential Qatari investor has flashed around football in the past few days, and agents working for other clubs have been trying frantically to court them to find out if they are interested.

    As one senior Premier League official said: “This would be Christmas come early and often for someone.

    “The big clubs are either not for sale or just not interested.

    “But one of the rest of us could get really lucky and come into a fortune at a time when so many are tightening their belts.”

    Football fan Sheikh Tamim managed to get his company’s name on Barcelona’s shirts, a remarkable development.

    But United proved outside his grasp, with the Glazers refusing to sit down with him.

  • brianofnazareth

  • RobDiablo

    From: http://soccernet.espn.go.com/news/story/_/id/983860/man-united‘s-debt-down-after-positive-financial-results?cc=5901
    “Manchester United’s gross debt has been cut to £433.2 million after posting a 16.5% increase in first-quarter turnover to £73.8m.”
    First off, how does posting an increase in turnover “cut” debt? I understand that increased revenue gives one a better opportunity to reduce debt, but, surely, making payments or buying back bonds* is still necessary. Were either of these activities recorded in United’s quarterly financial report? Ed…
    £433.2M represents about half of the debt the Glazers saddled United with back at the time of “purchase”, but, since they have chosen to hide the arrangements made to pay off the PIK debt, I can only guess that roughly another £200M needs to be added back to that earlier figure. Which means, that in six years plus, the Glazers have reduced the debt by around £200-£250 Million pounds, while spending (wasting) at least twice that amount doing so. At this rate, the Glazers will take a further eighteen years to pay off the debt and spend roughly £2 Billion in the process. Imagine the squads that kind of money could help assemble.
    *Purchasing bonds on behalf of United, that is; the Glazers buying back bonds for their personal portfolios does United no good at all.
    EDIT: most of figures and calculations were done in my head and based on what I think I remember the figures to be. I’m hoping that Ed and/or AndersRed will have pried better figures out of the financial reports and whatever the Glazers may have been forced to disclose as part of putting the IPO package together and will share them with us.