United shares to trade at discount
Manchester United shares will start trading in New York later today at a big discount on the club's earlier expectations over its worth.
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United's advisers will offer a 10% stake at a price of 14 US dollars (£9), valuing it at around £1.5billion, but much lower than the range of 16 to 20 US dollars (£10-12) it had hoped to achieve, worth up to £2.1billion.
The club, bought by the Glazer family in 2005 for about £800million, will raise about 233 million US dollars (£149million) and this will be partly used to pay off some of its debt.
The lower flotation price comes after the Glazer family, which also owns the Tampa Bay Buccaneers NFL gridiron team, previously failed to garner sufficient support to sell shares on exchanges in Hong Kong and Singapore.
However, United, which claims to have a global fanbase of about 660million and has won a record 19 league titles, is still one of the world's most valuable sports teams.
Its shares will begin trading today under the stock market ticker Manu.
Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said the lowering of the flotation price was "disappointing but not unexpected".
He added: "As was the case with the UK experience, football clubs are notoriously difficult investments, ultimately tied to the fortunes of the club on the pitch. However, interest in the sport is taking off in the US and last night's Olympics victory for the women's football team is likely to fuel interest further."
It had been expected that the Glazers would make about £90million from the deal, with the remaining proceeds raised in the initial public offering (IPO) used to pay down some of the 134-year-old club's debt, which was last reported to be around £423 million.
Although the listing has been planned for some time, the Glazer family originally claimed all the proceeds would go towards paying down United's debt, angering fans.
A successful IPO would reportedly result in investors owning 42% of the shares available but only carrying voting rights of 1.3%.
Earlier this month, a leading Manchester United fans' group called for a boycott of the club's expanding portfolio of sponsors in protest at the planned flotation.
A statement from the Manchester United Supporters Trust (MUST) read: "The Manchester United Supporters Trust has today called for a worldwide boycott of Manchester United sponsors' products, with support across the UK, Europe, Asia and the US.
"The boycott strategy is intended to send a loud and clear message to the Glazer family and club sponsors that, without the support and purchasing power of the fans, the global strength of the Manchester United brand doesn't actually exist."
MUST has tried such tactics before during the Glazer regime, although it has not prevented the Red Devils' territory-specific approach allowing them to become the first club to smash through the annual £100million barrier for commercial revenue alone.
MUST are happy a more realistic valuation has been placed on the Old Trafford outfit, but they feel a major opportunity has passed the Glazer family by.
"It would seem all the analysis of the true valuation was correct," said MUST chief executive Duncan Drasdo.
"As it stands the club is valued at around one-third less than the Glazer's expectations but many commentators expect the price to slide over the next two weeks once it opens for trading.
"On the one hand it's good to see more realistic valuations being made although it is very early days as the stock hasn't yet begun trading.
"This is a huge missed opportunity to allow fans to take ownership of the club and see the Glazers exit cleanly - that's the real tragedy."
Drasdo estimates 1.5million letters of opposition have been sent to the bankers associated with the IPO and United's massive portfolio of sponsors.
And he has urged that process to continue.
"We remain totally committed to fighting for fan ownership," he said.
"We intend to push on now, reaching out to United's global fan base.
"We call on all Manchester United supporters around the world to join the MUST campaign to put maximum pressure on the Glazers to stop looking after themselves and for the first and last time do what is best for Manchester United Football Club and put it up for sale at a reasonable price so that fans can once again share in real ownership of their club."