Glazer's aim to control Manchester United by selling shares without voting rights
Friday, 16 September 2011 01:15
Manchester United Football Club (MUFC) has received clearance to float on the Singapore Stock Exchange.
The move is aimed to help them raise $1 billion to pay off some of the company’s debts. This will be done by selling of around 25 per cent of the parent company’s shares. The Glazer family are hoping to receive around £600 million for the 25 per cent which would put the value of MUFC at £2.4 billion.
The clearance means that the football club can begin negotiating with potential investors.
The club would like the process; an initial public offering (IPO), to be completed by the end of 2011 and representatives of the club will spend the next few weeks promoting the club to potential investors.
However, the current economic climate could still see the club decide that now is not a good time to invest. A number of other high profile companies, such as Facebook and Groupon have delayed their own IPO’s, though Facebook says there decision is based on wanting to develop technological improvements before selling shares.
Vishnu Varathan from Capital Economic in Singapore said: "Volatile markets and weakening sentiment would be a major drawback for anyone who wants to list.
"It's not the most ideal time to list, it's not a bull market. Tapping new sources of funds could be a challenge and pricing could come under pressure."
Manchester United Football Club (MUFC) is currently profitable, having reported a record annual operating profit of £110 million for the year ending June 2011. However, the parent company owned by the Gleeson family is not.
MUFC are considering offering different types of share classes for sale, with some offering higher dividends but less voting rights. These are known as preference shares. This would be a method to help the Glazer family retain control of the club.
This idea is sure to be disputed by the Manchester United Supporters Trust (MUST) whose aim is to bring the club back into the fan’s ownership. They would see this method as an attempt to buy off the club’s supporters.
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