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LONDON – English Premier League soccer powerhouse Manchester United late Thursday priced its IPO at $14 per share, below the $16-$20 target range.
The lower pricing suggested that investors weren’t willing to pay up for a piece of the big soccer team that has in recent years often dominated the English league. But it did ensure that the club would finally go public again – in the U.S. – after a failed plan for an Asian IPO last year.
The IPO price values the club, known as the Red Devils, at about $2.3 billion, confirming its status as the most valuable soccer club in the world. Forbes magazine recently estimated its value at $2.23 billion thanks in part to its global fan base, lucrative sponsorship deals with the likes of insurer Aon and DHL Express and merchandise sales, up from $1.86 billion in 2011. That made the club the most valuable sports team in the world, followed by Spain’s Real Madrid with an estimated value of $1.88 billion.
The IPO price also values Manchester United, whose star players include English striker Wayne Rooney, slightly above the $2.15 billion price tag reached this year by the Los Angeles Dodgers baseball team.
The family of U.S. businessman Malcolm Glazer, who also owns the NFL’s Tampa Bay Buccaneers and controls Man U, is also seen as a winner as the club will use the $234 million raised by the IPO to pay off some of the debt the Glazers placed on it in their $1.47 billion buyout in 2005.
To the dismay of critical fans, the family will continue to control the club through so-called supervoting stock. The record 19-time English champions could benefit from the IPO by having increased financial flexibility for possible player acquisitions.
According to the Wall Street Journal, Man U becomes the first sports team to list on a U.S. stock exchange since the Cleveland Indians in 1998. Its stock will start trading on the New York Stock Exchange on Friday under ticker symbol “MANU.”
In the wake of the botched Facebook IPO this year, other recent IPOs have also priced below the price ranges targeted by the banks managing the stock market listings.
One Man U fan organization opposed to the Glazers’ ownership had said Thursday. “To us as supporters it looks a really poor share offer. Only one tenth voting rights and no dividends.”