MANCHESTER United has brushed off market concerns by kicking off a $383m (£243.8m) initial public offering in the United States last night.
Just a week after reports said the football club had put the brakes on its float due to lukewarm investor interest, Manchester United said in a filing it hopes to sell 16.67m Class A shares to help pay off its debts.
The shares, to be priced at between $16 and $20, will trade on the New York Stock Exchange under the ticker MANU.
The IPO documents also include an option to sell off more shares depending on demand.
The amount to be raised is slightly higher than some recent predictions, though down significantly from the club’s plans last year for a $1bn IPO. It values the firm at up to $3.3bn.
The club is now expected to embark on a global roadshow with its advisers to try and drum up renewed support.
Its banks include Jefferies, Credit Suisse and JP Morgan – but not Morgan Stanley, which was dropped when Man United ditched its ambitions to float in Singapore in favour of a listing in the States.
The Glazer family, which owns the indebted club, filed to raise a nominal $100m in New York last month.
The Glazers, who took control of the club in 2005, said last night they will take half the proceeds of the sale themselves as a “selling shareholder”.
The Glazers’ Class B shares will have 10 times the voting power of average investors’ Class A shares.
As recently as last week, there were grumbles around the City that the jittery equity markets that have scuppered a string of floats this year would also put a stop to Man United’s plans.
There were also concerns that the Glazers’ control of two thirds of the voting rights following the float, coupled with the lack of dividend payments for the foreseeable future, would discourage investors and fans from buying shares.
“I’m a little concerned that the offering couldn’t be done initially and now all of a sudden it has a heartbeat,” said David Menlow, president of IPO Financial, which tracks IPOs. “The mentality with sports teams is that people like owning a piece as a trophy investment, but will it live up to expectations?”
The club last night set out its hopes for lifting revenues by expanding its MUTV channel and exploiting mobile and new media sales. Revenues this year are set to fall five per cent to £315m, it added.
Manchester United had debts of £423.3m at the end of March, which will be cut to £345.4m using the proceeds of the IPO, it said yesterday.
The details were announced on the same day the club said it had signed a seven-year sponsorship deal with General Motors to have the Chevrolet brand on their shirts starting in 2014, thought to be worth $600m.