Manchester United Plans $1 Billion Float in Singapore: Sources
A stock market offering would reduce the American-owned soccer team's massive debt.
English Premier League soccer champions Manchester United are looking to raise $1 billion via a stock market flotation in Singapore by the end of 2011, sources with direct knowledge of the situation said on Tuesday.
A flotation could help reduce the club's huge debt pile which has helped make the owning Glazer family deeply unpopular with many fans, helping inspire slogans such as "Love United, Hate Glazer" brandished by some supporters.
The debts could also mean United could struggle to meet the "Financial Fair Play" rules put forward by soccer's European governing body UEFA, one of the aims of which is to limit the amount of borrowing clubs can take on, though the application of the rules on individual clubs remains to be seen.
It would be a second stock market incarnation for the club, which was listed in London before being taken over by the Glazers in 2005.
Banks Credit Suisse and UBS were close to winning the mandate for the initial public offering (IPO), a Reuters source with knowledge of the deal said. IFR, a Thomson Reuters publication, reported that Morgan Stanley were also in the running.
Sources could not confirm whether United's potential offering would include existing shares, which would involve the Glazer family cashing in on some of their stake.
Despite their unpopularity among fans, the Glazers have consistently said they do not plan to sell the club, making it more likely they plan to issue new shares to raise funds which could be used to reduce the club's huge debt pile.
Earlier this month, Britain's Sunday Mirror tabloid reported the Glazers were looking to sell as much as 25 percent in a share offering. It was unclear whether the $1 billion figure related to the sale of a stake of this size.
United have an estimated 333 million fans globally and more than 190 million in Asia. As with many other English soccer teams, the Asia region has become an important growth area for the club, with media speculation in recent months suggesting Hong Kong as the most likely destination for an IPO.
One source said the loss-making club had switched to Singapore from Hong Kong, which has become the venue of choice for global brands such as fashion house Prada SpA and cosmetics maker L'Occitane International, but did not give a reason.
Hong Kong bars unprofitable companies from listing on its exchange. United's 2010 full-year results showed gross debt attached to the club standing at 522 million pounds ($857 million), with a net loss of 84 million pounds.
The Glazer family, which took United private following their 790 million pounds takeover in 2005, has endured a turbulent spell at the helm of the Old Trafford side. Fans have taken to wearing the green and yellow colours of United's predecessor club Newton Heath in an anti-Glazer campaign.
The Americans have been criticized by supporters who are uncomfortable with the club's levels of debt, despite continued on-field success, most recently last season's record 19th league title.
A multi-million-pound summer signing spree of players including Ashley Young from Aston Villa may have helped assuage fan concerns, along with an opening day 2-1 league victory against West Bromwich Albion.
The IPO of a globally recognized brand such as Manchester United would be a coup for Singapore, which has been competing with Hong Kong for international listings.
Despite winning the biggest IPO in Asia Pacific during the first half of 2011 -- the $5.45 billion deal from Hutchison Port Holdings Trust in March -- Singapore's $7.1 billion in IPO proceeds in the period paled in comparison with Hong Kong's $13.4 billion, according to Thomson Reuters data.
A Manchester United spokesman said the club do not comment on speculation, while Morgan Stanley declined to comment.
A UBS spokesman in Hong Kong declined to comment. Credit Suisse was not available for comment.