Man Utd seek $100m to shore up debt

[Reacher]

Talking to my old man last night and he's read that the glazers are hoping for over subscription and as much as 37% of the club could go in class A and B shares and that'd wipe out the debt, with the Glazers keeping hold of the lion share. Anyone else read this?

[ChicagoRed]

Potentially, but it would dilute the owners holding in the club and isn't guaranteed to increase their value. Plus then you have extra shareholders who's only outlook is to see an increase in the value of their shares and who would expect a dividend out of the club if it was profitable.

To put it simply: say we wanted to raise 150 million quid, and the market valued the club at say 450 million, so that FSG would be giving up a third of their holding to raise the money. They would then need to see the value of the club increase to match that - i.e. after expanding/building a new stadium the club would need to be worth over 675 million - and revenues would need to be a lot higher to pay out shareholders.

 

It's not actually going to raise any money, because it will be used to repay the same amount of debt. The benefit being that interest on that debt will be eliminated.

 

Additionally, if the offering is over subscribed, it will lead to a bigger share issue to remove even more debt.

 

At this moment it's hard for me to understand why an investor would buy into this but that depends on the asking price.

[kalasoma]

Talking to my old man last night and he's read that the glazers are hoping for over subscription and as much as 37% of the club could go in class A and B shares and that'd wipe out the debt, with the Glazers keeping hold of the lion share. Anyone else read this?

 

Only class B shares to be sold on NYSE, according to reports at the moment. That's what I've been reading. Class B have no dividends and no voting power. They want to make as much money as they can. I haven't heard anything about the percentage of shares being sold or whether B shares sold would cover the entirety of the debt owed.

 

Glazers are not selling (their) class A shares, as much as I can tell from the finance and sports journos writing about this. Not yet, anyway.

[lifetime fan]

I wonder why Slur was defending the Glazers last week?

 

 

Sir Alex Ferguson was facing mounting anger over his longstanding defence of the Glazer family yesterday after it emerged that the Manchester United manager could be in line to receive a cut of shares worth up to £204 million should the club successfully float in New York.

 

Ferguson, David Gill, the United chief executive, and other senior figures at Old Trafford may reap a huge windfall from shares and share options if the Glazers manage to list the club on the New York Stock Exchange in the coming weeks.

 

Under the so-called “2012 Equity Incentive Award Plan” detailed in the revised prospectus filed to the US Securities and Exchange Commission on Monday, 16 million shares will be issued to “attract, retain and motivate selected employees, consultants and non-employee directors through the granting of share-based and cash-based compensation awards”.

 

Based on the top proposed price of $20 per share, the plan could be worth as much as $320 million (about £204 million) and even at the lowest price of $16, the scheme would still be valued at $256 million. Although there are no guarantees that Ferguson or Gill would be included in that “selected” group, it seems unthinkable that they would not be given their critical roles at the club.

 

Ferguson has attracted criticism from some supporters for his repeated public defence of United’s controversial American owners. Only ten days ago, while on the South Africa leg of the club’s pre-season tour, the manager described the Glazers as “great” and insisted that they had “always backed me whenever I have asked them”.

 

But the revelations about the equity plan have led some United supporters to question Ferguson’s motives for defending the Glazers. Andy Green, a London-based financial analyst and prominent United fan, told Sky News yesterday: “We found out in the prospectus that he [Ferguson] and other senior management will be entitled to a share of 16 million shares — that’s $288 million worth of shares and share options [at the mid-price range] — so I think we now know why Sir Alex was so in favour of the Glazer family.”

 

Green’s remarks follow a letter sent by the Red Issue Main Forum — a significant group of United fans — to Ferguson outlining their “concern” over his continued support of the owners and a request for ten key questions to be answered.

 

The Glazers will begin their marketing road show for investors today. It is expected to last until a week tomorrow and will take in events in Kuala Lumpur, Singapore, London and New York. United hope to launch on the New York Stock Exchange as early as Friday week and plan to raise up to $383 million (£244 million).

 

Having stated in the preliminary prospectus on July 3 that they “intend to use all of our net proceeds from this offering to reduce our indebtedness”, the Glazers have angered fans by revealing that they now plan to use only £75 million of funds raised from a successful flotation to reduce the club’s loans and keep half the proceeds for themselves.

 

A saving of £75 million on United’s debt mountain — which is expected to stand at £437 million for the year ended June 30, according to the forecasts in the latest prospectus — would reduce the present annual interest bill of about £45 million by only £6.5 million a year, or £4.2 million after tax.

 

Should United achieve their top price of $20 per share, the club would be valued at $3.6 billion (£2.3 billion), with several analysts wondering whether a successful listing could be the precursor to a sale. Nonetheless, it is far from certain that United will be able to get the price that they are looking for, with investors cautious of new listings in the face of volatile markets.

 

There is also a perception that some recent flotations, such as Facebook, have been overpriced. The socialnetworking site’s share price has fallen by about 40 per cent since it listed in May.

 

The key figures

 

£2.3bn

 

Value of United should they achieve top price of $20 per share

 

£437m

 

United’s forecast debt mountain £244m Funds the Glazers could raise through a successful flotation

 

£75m

 

Sum that would be used to cut debt Source: Revised prospectus to US Securities and Exchange Commission

[xerxes]

How British clubs are managed and financed matters to all of us, but as fans our influence is modest.

 

It appears that the in house take (Directors fees)may be as much as £45m, no wonder Fergie is happy.

 

That the target market for this is abroad tells us much about the direction of the game. CL pre-eminence is the platform for lots of money in the future. But we should also note that in China and russia now there are clubs who can beat PL wages, and Brazil goes from strength to strength economically, Euro raiding of South American talent is coming to an end.

 

If a Hong Kong investor wants to put a few bob into a PL football team it is neither here nor there now to the man in the street, our moment is long gone.

[OOTer]

This is the tread I wanted to post this in.

 

Have $2,000 In Cash In Your Fidelity Account? Then You Too Can Qualify To Lose Money On The Manchester United IPO | ZeroHedge

 

From a financial type blog. Seems like if you want to buy the Man U shares from this 'broker?' you need to have $2000 in credit. Ie. Be prepared to loose it straight away a la the Facebook sale.

 

Seems like a few people are intending to make some money of this by betting on this instant decline in share price.

 

Don't profess to know much about the finance world though, so maybe someone else can explain what this is all about.

 

Good blog though if you're into the GFC.

[Gym Beglin]

United owe £470m.

 

How is that possible for a football to club to owe £450m and still operate? One day, one day, that will come home to roost.

[Bobby Hundreds]

United owe £470m.

 

How is that possible for a football to club to owe £450m and still operate? One day, one day, that will come home to roost.

 

It never will for some reason they're the jewel in the crown for football, they will be bought by some filthy rich fucktards. I'm still praying for a meteorite to hit old trafford when they are playing Chelsea, whilst the city owners are there in the stands.

[silverlining]

United owe £470m.

 

How is that possible for a football to club to owe £450m and still operate? One day, one day, that will come home to roost.

 

That debt is not the fault of the club or how it is run. It's the Glazers debt. They have a huge fanbase and massive commercial and matchday revenues.

 

Before that takeover mired them in the very debt that funded the takeover

 

It does not compare with the farcical financial situation at Chelsea or Arab City

[05 Milan]

United owe £470m.

 

How is that possible for a football to club to owe £450m and still operate? One day, one day, that will come home to roost.

 

Obviously they have sufficient cash flow from operations to manage the debt and still fund new signings, like they did last year and will this summer.

 

Funny that through all this horrible financial struggle they've still managed to rake in major throphies at a decent pace.

 

What happens if interest rates suddenly sky-rocket is another question, though. But that looks unlikely in the foreseeable future.

[Ezekiel 25:17]

I'm sorry did someone say sympathy, i'm not sure I follow ? By sympathy do they mean desperately hoping they go fucking bust and out of exsistence ? If that's the case then I have a lot of sympathy for them.

[Iceman]

No sympathy for the devil, as they say. And now slur is pocketing his share. What a cunt he is.

 

We all know they have to be decapitated and burnt before they can ever truly be considered dead, but the fact is they are over half a billion dollars in debt. Half a billion!!! That is a hell of a lot of wedge whichever way you spin it. Could they ever do a rangers? Dare we dream?

[WaltonRed]

Would love to see them do a Rangers but we'd not benefit cos we'd just be fighting for 6th rather than 7th or 8th!

 

Whilst city would clean up

[Reacher]

No way would the FA allow a Rangers happen to UTD. They bring in far, far to much money for that to happen.

[Unrighteous]

Ferguscum showing his true colours.

[Megadrive Man]

Why would they 'do a Rangers'?

 

It's nothing like the Rangers situation. Rangers and also Portsmouth, have gone in to oblivion because they were spending way, way beyond and above their means.

 

United were recently valued at $2.2 billion, they are the highest valued club in the world. They are a money making machine globally and they are continuing to grow revenues.

 

All the Glaziers are doing currently is hampering the clubs ability to compete at the top level, as far as transfers and wages are concerned. It's a similar way to how Cancer and aids tried to run things here, however The Glaziers have got the advantage that United already have a huge stadium and a successful manager, and a squad of players which is keeping them at a competitive level despite not having the funds of City or Chelsea.

 

The problems will only start to come to ahead when the team starts to crumble. Much like ourselves in 09/10. A loss of champions league football, plus the retirements of Slur Alex, Giggsy and Scholes are the most likely causes of their downfall, but the Glaziers have until this time to find a solution.

 

I'm intrigued to see how it all plays out. The best part is, the fans were right to protest with the green and gold campaign, but didn't see it through!

[fowler9]

No way would the FA allow a Rangers happen to UTD. They bring in far, far to much money for that to happen.

 

I tend to agree although I'd have said the same about Rangers and the SFA given Rangers are far more important to Scotland than anyone is to England given there is only Celtic and Rangers whereas if Scum went bust the additional income they bring in would probably just transfer accross to whoever was most successful at the time they went, having said all that though I imagine the SFA is far less corrupt than ours

[Megadrive Man]

A good article to read about the IPO

 

Richard Jolly: Manchester United IPO - Q&A - ESPN Soccernet

[Megadrive Man]

I tend to agree although I'd have said the same about Rangers and the SFA given Rangers are far more important to Scotland than anyone is to England given there is only Celtic and Rangers whereas if Scum went bust the additional income they bring in would probably just transfer accross to whoever was most successful at the time they went, having said all that though I imagine the SFA is far less corrupt than ours

 

Rangers were taken over by a man who financed a takeover with money secured against future season ticket sales!

 

It's Incredible that this was ever allowed to happen. Anybody with even the smallest of brain cells could see that this was a disaster waiting to happen.

[russ1979]

Fuck man utd. Hope the glazers run them in to the ground

[Section_31]

Fuck man utd. Hope the glazers run them in to the ground

 

Our main rivals gone and two clubs run by Jabba the Hutt and a Russian gangster winning everything, every year, forever. Sounds great.

[WaltonRed]

while were run by people who seemingly dont give a flying

[Funkasy]

I would rather fight first spot against utd. then the russian/arab oil/blood money. I hate them cheating assholes with bottomless pockets much more then i hate utd now a days.

[Unrighteous]

I would rather fight first spot against utd. then the russian/arab oil/blood money. I hate them cheating assholes with bottomless pockets much more then i hate utd now a days.

 

No club could ever push United away from the top... whilst United stay in top flight football.

[Megadrive Man]

Another good article on this

 

The Manchester United IPO stinks- MSN Money