March 4, 2021

Heavily in debt, MU Offer Shares

England football team, Manchester United, said it would offer 16.67 million shares at a price of 16 dollars and 20 dollars. Maximum value will reach 3.3 billion U.S. dollars.
The team chose to list their stocks in the U.S., after a year off in Hong Kong and Singapore.

Manchester United had to fight against the entanglement of debt, after being acquired by Malcolm Glazer finance of Florida in 2005. Glazer and the club will each sell half its shares. Proceeds from the sale of shares, will be used to reduce the debt of 423 million pounds by March 31 to 345.4 million pounds.

Glazer family will remain the dominant shareholder, after removing 89.8 percent of the shares of class A and B. Sales of these shares will likely have a big challenge in the U.S. market, because it looks less publicity compared to the stock offering other sports clubs. Furthermore, football is also not a favorite sport in the U.S..

The club’s financial statements also make investors wonder. Revenue for 2011 was estimated at 315-320 million pounds, down about 3 percent to 5 percent from a year earlier, due to decreased revenue from games such as ticket sales and advertising are both down.

On the other hand, expenditures have increased 4 percent to 5 percent, because there are additional players and staff salaries. The determination of stock prices based on the expected profit of 21 million pounds and 23 million pounds this year. This calculation makes the stock price to earnings ratio for both series A and B 95 times.

The club is only making a fortune, because crediting a tax of 27-29 million pounds.
Details regarding the sale of its shares is disclosed, together with the signing of the sponsorship agreement with General Motors for seven years starting in 2014. Value reached 600 million U.S. dollars.

Manchester United will begin offering on Wednesday, not only to the United States but also to Europe and Asia.