| Man. U. cuts US IPO price to $14 on profit woes |
WASHINGTON Britain’s world-renowned soccer club Manchester United has slashed the price of its US share offer, cutting the proceeds from Friday’s listing to $233 million from a hoped-for $300 million.
The fabled team, mired in debt since 2005 after a heavily leveraged takeover by the Glazer family of Miami-based investors, cut the price for the 16.7 million shares on offer to $14 late on Thursday from the planned $16-20 range.
The company gave no reason for the decision but it comes amid doubts about the club’s ability to boost profits as long as it carries such a hefty debt burden - Morningstar analysts estimated a fair price at just $10.
Investors have also become wary about aggressively priced initial public offerings after the much-promoted Facebook launch soured, with the social networking giant’s shares slumping by nearly half since its May 18 listing.
Critics assailed the Glazers’ plan to allocate just half of the IPO proceeds to reducing the team’s current £423-million ($660 million) debt burden.
The other half will go to the Glazers themselves, who are contributing 8.33 million shares to the IPO.
In addition, despite putting 10 per cent of the shares of Manchester United Ltd on sale, the Glazers will retain 97 per cent voting control of the listed company via their lock on its “B” shares, which have 10 times the voting power of the “A” shares being sold to the public.
That arrangement reportedly caused regulators in Hong Kong and Singapore to balk at a listing in their markets where the club had hoped to tap the interest of tens of millions of Asian fans.
Agence France-Presse
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