Premier League football club Manchester United has received permission from the Singapore Exchange for a planned $1 billion (£633m) listing in a deal that would include non-voting preference shares, two sources told Reuters.
The IPO would include stapled securities that bundle with ordinary and preferential shares, one of the sources told Reuters, consistent with expectations the club would issue more than one tier of stock to ensure the Glazer family that owns the club retains control.
By combining ordinary and preferential shares into a single security, Manchester United would effectively create a category of shares with lower voting rights, but higher dividends.
The two-tier system has drawn criticism from investors and fans alike.
The football club wants to raise cash to help cut almost $500m n in debt. Its choice of Singapore was aimed at expanding the club’s huge Asian fan base as well as tapping the region’s stronger growth and investment climate.
“The main issue now is the financial position of the company and they would have to convince potential investors that it’s not going to be an issue going forward given that the global outlook is a little bit slower,” said Lorraine Tan, director of Asia equity research at S&P Capital IQ, a unit of Standard & Poor’s.
“Investor interest is always going to be a question of valuation, but they are a big enough brand name, so I think they are not going to be heavily discounted like an unknown company.”
Many of the club’s estimated 333m global fans are sceptical of the Glazers who bought the club in 2005.
Duncan Drasdo, chief executive of Manchester United Supporters Trust, recently told Reuters that the degree of control by one majority shareholder has to be a concern for minority investors seeking a decent return.