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Manchester United IPO to tap massive Asia fan base

17 august 2011, 14:24
0
Manchester City's Argentinian forward Sergio Aguero. ©AFP
Manchester City's Argentinian forward Sergio Aguero. ©AFP
Legendary English football club Manchester United plans to tap its massive Asian fan base and raise up to $1 billion by listing 30 percent of its shares in Singapore, AFP reports, citing media reports Wednesday.

The Straits Times newspaper said representatives of the English Premier League champions met with Singapore Exchange (SGX) officials recently.

Representatives of the Glazers, the American family that owns the debt-plagued club, have been meeting bankers in the city-state, it said.

State investment agency Temasek Holdings was being eyed as a cornerstone investor, the newspaper added.

An SGX spokesperson told AFP it was the exchange's policy not to comment on press reports.

Sources told Dow Jones Newswires the initial public offering (IPO) was being planned for the fourth quarter and that Credit Suisse Group had been mandated as sole global coordinator and bookrunner on the deal.

The estimate of $1 billion for 30 percent of the club's shares means a total valuation of more than $3 billion, far higher than other estimates.

United was ranked by business magazine Forbes earlier this year as the world's most valuable football team in 2011, with a value of $1.86 billion.

Analysts said the IPO was designed to exploit the deep capital markets of Asia, where United has an estimated 190 million fans or more than half of its estimated 300 million followers worldwide, press reports said.

Singapore's Business Times also noted that the timing of United's IPO would come ahead of new regulations making it mandatory for European clubs to break even from the start of the 2013/2014 season.

If not, they risk being expelled from European club competitions.

The club, which was once listed on the London Stock Exchange as Manchester United PLC, had initially planned to list in Hong Kong.

But it changed is its mind and now prefers to list in Hong Kong's regional rival Singapore, according to the Dow Jones sources.

United were delisted from the London exchange in 2005 after US tycoon Malcolm Glazer bought the business, which is currently deep in debt.

Singapore's Business Times said the club is currently 717 million pounds ($1.18 billion) in the red.

A Singapore listing by United is expected to boost the city-state's credentials as a financial centre.

The China port unit of Hong Kong giant Hutchison Whampoa -- Hutchison Port Holdings Trust -- raised $5.5 billion in Singapore earlier this year.

But Hong Kong also had its own coups when Italian luxury design house Prada raised $2.15 billion in an IPO there and Samsonite, the world's biggest luggage maker, increased the size of its Hong Kong IPO to nearly $1.3 billion last month.

CIMB regional economist Song Seng Wun said he was not surprised that United chose to list in Asia.

"More than half of their fan base is in Asia -- from China to Korea and all the way to Southeast Asia," he told AFP, adding the IPO should be well-received.

"Every die-hard Man U fan will be out there... There are a lot of Man U fans who are able to subscribe but there are also those who are too young to have a trading account who will have to ask their parents."

English football counts wealthy Asians among its most ardent fans.

Singaporean billionaire Peter Lim, a self-confessed United fan, last year lost a bid to buy Liverpool for 320 million pounds.

Lim could not be immediately reached for comment on Wednesday.

"The Asia economic growth story is very clear, so it will not be an unexpected move," analyst Song said of the IPO.

"It makes sense for bankers to follow where the fans and the money are," he added.


By Martin Abbugao

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