(Added valuation expectations, roadshow details, analyst quote)
By Olivia Oran and Stephen and Lacey
July 30 (Reuters) – English soccer team Manchester United
set the terms for its U.S. initial public offering on
Monday saying it will offer 16.67 million shares at between $16
and $20 each, which values the club at $3.3 billion at the top
of the range.
Manchester United has been struggling with a hefty debt
burden ever since being acquired by the family of Florida-based
businessman Malcolm Glazer and his family in 2005.
The club and the Glazers each will be selling half their
shares each in an offering that will raise as much as $333
million. The club’s proceeds from the IPO will be used to reduce
its debt.
The IPO may be a tough sell in the United States given the
lack of U.S. publicly traded sports teams to compare Manchester
United against and given that many Americans don’t regard soccer
as a top sport.
But the details of the sale were announced just as it was
revealed that the club had signed a 7-year sponsorship deal with
General Motors Co to have the Chevrolet brand on their
shirts starting in 2014. The deal is worth roughly $600 million,
Reuters reported.
The club had filed to raise up to $100 million in its IPO of
Class A stock earlier this month.
Manchester’s United will kick off a two-week investor
roadshow on Wednesday, with stops expected in the United States,
Europe and Asia, according to a source familiar with the
company’s plans who was not authorized to speak publicly about
them. The road show stops will be done concurrently, with
separate management teams covering different geographies.
Pricing is expected on August 9.
The team chose to list in the United States after scrapping
listings in Singapore and Hong Kong. It had originally looked to
raise as much as $1 billion in Singapore.
“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 Glazers also own the U.S. football team the Tampa Bay
Buccaneers. They will retain control after the sale because
their Class B shares will have 10 times the voting power of
average investors’ Class A shares.
Jefferies Group Inc is the lead book runner in the
syndicate, which also includes Credit Suisse, JPMorgan Chase,
Bank of America Merrill Lynch and Deutsche Bank. The company
will list on the New York Stock Exchange under the ticker
“MANU.”
Morgan Stanley bowed out of bringing the deal to market when
Manchester United decided to list in the United States.
(Additional reporting by Ashutosh Pandey in Bangalore; Editing
by Richard Chang and Leslie Gevirtz)
