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19/09/2011

2011-09-20 Manchester United IPO press update from MUST - the Manchester United Supporters Trust

Is anyone buying this briefing that the Glazers retaining a huge majority by only floating the absolute minimum proportion of voting shares (12%) and bundling them with non-voting preference shares is in anyone's interest other than their own? Clearly this is signficantly detrimental to good corporate governance and protecting the interests of minority shareholders as so powerfully outlined in the article below by Professor MAK YUEN TEEN of the National University of Singapore Business School (article *[11] below).


*Newly added articles

*[11] Will Manchester United score with investors? - MAK YUEN TEEN - The Business Times - 20th Sep 2011

*[10] Manchester United may delay Singapore floatation - Simon Stone, PA - The Independent - 16th Sep 2011

[9] Manchester United listing to be postponed over market turmoil -  Robin Chan - The Straits Times - 17th Sep 2011

[8] Jitters over market for Man U IPO - Robin Chan - The Straits Times - 16th Sep 2011

[7] Manchester United Said to Get Singapore’s Approval for Listing - Joyce Koh - Bloomberg - Sep 16th 2011

[6] Investors cautious on Man Utd's IPO - Stella Lee -Channel News Asia - Sep 2nd 2011

[5] Man Utd's two-tier IPO plan risks investor yellow card Reuters Asia DEALTALK - Saeed Azhar and Rachel Armstrong Sep 8 2011

[4] Manchester United IPO - Financial Times - Lex

[3] Reuters Insider - Nigel Hilditch - Aug 24 2011

[2] Man Utd's IPO not "all that attractive", say analysts - Channel News Asia - Amanda Feng - Aug 19 2011

[1] Man Utd taps up Peter Lim for IPO - Financial Times - Kevin Brown in Singapore Aug 19 2011



*[11] Will Manchester United score with investors? - MAK YUEN TEEN - The Business Times - 20th Sep 2011

Its IPO fans would have to consider the issues of dividends and preferential rights

By MAK YUEN TEEN

AFTER the slew of S-chips over the past few years, it appears that we will soon have our first F-chip listed here ('F' is for football, of course).

Here comes the F-chip: Manchester United is now reportedly offering an ordinary-preference shares 'combo' to be sold as a package
Earlier media reports had suggested that Manchester United had wanted to list here with a dual-class share structure. It has now reportedly come back with an ordinary-preference shares 'combo' to be sold as a package.

It is unclear from the reports so far as to what preferential rights the preference shares will actually have. The Financial Times has reported that the preferential shares do not have dividend guarantees or a redemption feature. Reuters has reported that the preference shares will have preference over ordinary shares for dividends and on liquidation. Bloomberg has reported that the preference shares may pay double the dividends of ordinary shares.

Since dividends for shares (whether ordinary or preference) are never guaranteed and have to be declared by directors, the Financial Times report's reference to a lack of 'dividend guarantees' may be alluding to the absence of a cumulative dividend feature for the preference shares.

Without a cumulative dividend feature, the preference shareholders will be exposed to significant risk. This is because a company may not pay any dividends for a number of years, and then pay the stated annual dividend for preference shareholders without having to make good dividends in arrears.

It is then free to pay dividends for ordinary shareholders, which of course can be much larger than the dividends for preference shareholders. Hopefully, the terms of the Manchester United offering will provide protection for preference shareholders in this regard.

However, Manchester United may not be in any position at all to pay dividends for the foreseeable future because Manchester United has not been profitable. Of course, its lack of profitability has much to do with interest payments on its debt and a key reason for the share offering is to repay debts.

The reports have highlighted that the preferential shareholders will have priority of claims in the event of insolvency. This right offers little protection to preference shareholders as any assets on insolvency will first go to secured and unsecured creditors.

The preferential right on insolvency is like tickets to watch a 'live' match - on television.

Those who are considering subscribing for the share offering would be well-advised to consider carefully the likelihood of dividends and the preferential rights of the preference shares.

Beyond the issue of the features of the preference shares and the likelihood of dividends, the 'two-in-one' combo is, in my view, essentially the same as dual-class ordinary shares.

As the Glazers are likely to hold largely the ordinary shares with voting rights, they would control more voting rights with less investment than public shareholders who have to buy the both types of shares - as would be the case with dual-class ordinary shares.

It appears that after being told that dual-class ordinary shares are not acceptable, Manchester United has merely come back in a changed strip. Replacing dual-class ordinary shares with stapled ordinary and preference shares is, in my view, 'creative' financial engineering.

Governance concerns

It has also been reported that the percentage of ordinary shares in public hands will be as little as 12 per cent, which is the minimum free float required under the Singapore Exchange (SGX) listing rules for companies with market capitalisation of at least $1 billion. All the signs all point to an attempt to comply with the minimum letter of the rules.

By allowing such a stapled share offering for Manchester United, it would be difficult for SGX to turn down other similar offerings.

Going forward, IPO investors may soon be able to only buy burgers if they also buy fries and drinks.

Then there are the issues of corporate governance. An article in The Guardian last year reported that the Glazer family took £20 million (about S$40 million) in loans and fees from the club. One of the key risks for companies with controlling shareholders is that controlling shareholders may be able to use such related-party transactions to take money out of a company, even if the company is unprofitable and unable to pay dividends to shareholders.

Therefore, while public shareholders may not receive any dividends, controlling shareholders can still receive a 'return on their investment'.

When Manchester United becomes listed, it will of course be subject to checks and balances in SGX's rules on interested party transactions. The effectiveness of these checks and balances depends a lot on the true independence of the independent directors, especially those on the audit committee which is supposed to oversee such transactions.

Given the control rights held by the Glazer family, it would be very difficult to have truly independent directors to ensure that these checks and balances are effective - even if these independent directors are Arsenal supporters.

A recent Business Times report 'SGX learns Chinese lessons, tweaks rules' (Sept 15) commented on the corporate governance-related rule changes introduced by the SGX, many of which reflect the lessons it has learnt from S-chip debacles.

Having learnt its Chinese lessons, it appears that SGX is now starting English lessons - taught by Americans no less - kicking off with the Manchester United listing.

The writer is an associate professor at the NUS Business School

http://www.businesstimes.com.sg/sub/views/story/0,4574,457018,00.html


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*[10] Manchester United may delay Singapore floatation - Simon Stone, PA - The Independent - 16th Sep 2011

Manchester United may put their Singapore flotation plans on hold until volatility in Stock Market conditions starts to ease.

United, who have privately dismissed renewed speculation about a potential £1.5billion sale to the Qatari Royal Family, have been given permission to launch a flotation.

It had been thought the Glazer family would actively pursue a move that would allow the whole process to be completed by the end of next month, which is still possible.

However, with the club keen to ensure a successful flotation, insiders say they are currently "in no rush" to execute their plans.

One of the reasons for this could be to allow the Stock Market to settle, thereby maximising returns which the Glazer family are hoping will be around £600million if, as anticipated, they opt to put 25% of the club on the market.

Details are yet to be released. However, it is expected the listing will involve a complicated mixture of primary shares, new shares which would dilute the Glazer family's interests, with the money going to the company, and secondary shares, which would involve the sale of existing shares, with the proceeds going directly to the Americans.

Also uncertain at this stage is how the Glazers intend to control the company, with some shares expected to be preference shares, which have no voting rights but would be worth more.

Opponents of the Glazer family have already called on them to use the money raised to clear United's debt, reduced to £308million in the most recent accounts, released earlier this month.

However. it is not known how the American owners managed to pay off £220million of payment-in-kind notes in November last 

Reader comments:
So the glazers think the club is worth some $4billion, and the asian market can be conned into believing this despite just recently holding over £500million of debt and making a loss every year.

Having managed to suddenly hide £220m of debt, it still leaves over £300m of debt.

Only then did they managed to show a £110m profit however the parent company lost £109m but that's still a hell of a price to earnings ratio even with the fraudulent accounting.

This is the wonderful world of finance full of spivs and schiesters taking anyone they can for a ride, having not spent a single penny of their own money.

If the share sale succeeds, they won't have to refinance the bonds (which would be tough today) and of course they end up with 75% of the shares valued at offer price of £1.8billion.  Not bad when you bought the entire business out of debt in the first place.

The shares are of course not worth anything like the touted amount, but it remains a no lose proposition for the Glazers.

1. They lower the debt to an easily manageable amount (probably they halve it, too greedy to wipe it out).

2. Whatever price the shares are, they own 75% of them after the sale - cashable value they don't have right now, with a dividend privileges for a great income stream.

3. If the shares fall, they've already been paid for 25% of them.  And they may beable to buy them back for considerably less in the future and then manipulate the accounts to drive the price back up for resale.

4. If the shares rise, their 75% holding rises.

AT the end of the day, over £500m of debt, hidden, a loss making business despite high turnover and they think investors will find this attractively valued at £2.4billion.  Are investors really that stupid?

http://www.independent.co.uk/sport/football/premier-league/manchester-united-may-delay-singapore-floatation-2355732.html

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[9] Manchester United listing to be postponed over market turmoil -  Robin Chan - The Straits Times - 17th Sep 2011

Market turmoil forces it to delay plans after it had received listing nod

The rocky share market has forced football giant Manchester United to postpone its initial public offering (IPO), a source told The Straits Times.

The club received the go ahead to list on the Singapore Exchange (SGX) on Friday - as tipped by The Straits Times - but its intended debut in mid-October has been put off and no new date has been given.

Bankers fear the market turmoil caused by the European debt crisis will deter investors.

If that was not enough for the financiers to worry about, another potential disruption emerged from left field on Friday in the form of a buyout rumour.

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_713855.html

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[8] Jitters over market for Man U IPO - Robin Chan - The Straits Times - 16th Sep 2011

Manchester United is expected to get the green light to list today but volatile markets and weak investor sentiment could confine the club's initial public offering (IPO) to the sidelines for a while.

Bankers with knowledge of the listing said there is concern Man United will not attract enough hard-nosed investors who can see past the glamour and actually stump up cash amid testing economic times.

"If you look at the markets now, nobody is listing. We will continue to watch that," said one banker involved in the deal.

Man United plans to raise up to US$1 billion (S$1.2 billion) from selling about a third of the shares in the company but the complex structure of the deal is still being ironed out.

Senior bankers from Credit Suisse, JP Morgan and Morgan Stanley - who are managing the listing - and their research teams were in London last week to meet the football club's representatives, The Straits Times understands.

They have also discussed marketing strategy to pull in international investors.

Once the Singapore Exchange (SGX) issues the eligibility to list, Man United will have up to three months to go to market but an IPO is expected as soon as mid-October if the club believes investors are receptive.

While the club's intention to list is clear, just what form the IPO will take is still up in the air.

"Nothing is set in stone. We have a structure in place that allows us to be flexible," the banker said.

What is known is that the listing involves issuing a complicated mixture of different types of shares as the Glazer family, which owns the club, wants to protect its control but has to make the listing attractive enough to investors.

A banker with knowledge of the transaction said two aspects are still being finalised.

One is determining how much of the equity offering will be in primary or secondary shares.

Primary shares means issuing new common stock, thereby diluting the Glazers' interests. The cash raised from the listing then goes to the company, rather than the Glazers' own coffers.

In a secondary share offering, existing shares owned by the Glazers are sold instead, so they pocket the cash directly.

The second area of uncertainty centres on how control of the company can be maintained.

The Glazers will likely sell their shares as a package, possibly with one preference share and one ordinary share.

Preference shares have no voting rights but can be sold at double the value of ordinary shares. Holders of these shares would also be paid before common shareholders in the event of an insolvency.

In this way, an investor would have only a fraction of the voting rights compared to his total equity share.

This would appear to be the compromise for the Glazers the SGX has allowed.

SGX chief executive Magnus Bocker ruled out a company listing with different voting rights, and said the one share, one vote system in Singapore would be adhered to. The Companies Act forbids a dual-share listing.

A Financial Times report this week said that in one scenario, as much as 88 per cent of the voting rights could be maintained in the Glazers' hands although up to 36 per cent of the equity could be sold.

The Man United IPO could be one of the speedier launches staged here, reflecting Mr Bocker's bid to shorten the listing process to win more international listings.

Mr Bocker said earlier this year that the stock exchange has been in a "testing phase" since April last year to reduce the listing process from 12 to eight weeks.

This has allowed issuers to submit their draft listing prospectuses to the Monetary Authority of Singapore for pre-lodgment review at the same time that they submit their listing applications to the SGX.

http://www.asianewsnet.net/home/news.php?id=21789&sec=2


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[7] Manchester United Said to Get Singapore’s Approval for Listing - Joyce Koh - Bloomberg - Sep 16th 2011

Sept. 16 (Bloomberg) -- Singapore’s stock exchange approved Manchester United’s application to raise about $1 billion in an initial public offering in the city-state, two people with knowledge of the matter said.

As much as two-thirds of Manchester United’s offering will likely be in preferred shares, which may carry at least double the dividend of ordinary stock while lacking voting rights, said the people. They declined to be identified as the IPO process is private.

United’s dual-share structure offers a way for the Glazer family to retain control of the football club after the IPO, the people said. Singapore’s bourse lured United in part by offering a speedier approval process for the IPO, people with knowledge of the matter said last month. United applied for the Singapore listing on Aug. 18, they said.

“Football clubs around the world are mostly quite closely held and not very transparent,” Pearlyn Wong, an investment analyst in Singapore at Bank Julius Baer & Co., which manages about $190 billion globally. “They don’t like to give up voting rights so they can make faster decisions over things like players and management.”

United, which was planning to list in the first half of October, is reviewing the IPO timeline amid volatile markets, the people said. Stock offerings have dwindled worldwide as Europe’s escalating sovereign debt crisis and a faltering U.S. economy dented demand for new equity.

Manchester United spokesman Philip Townsend and Singapore Exchange spokeswoman Carolyn Lim declined to comment.

Bundled Offering

The preference shares will be bundled with ordinary shares for the offering, though each security will be quoted separately on the stock exchange, the people said.

“Usually preference shares come as a follow-up offering, rather than at the IPO stage,” Julius Baer’s Wong said. “Whether people will receive the share structure well depends on how much dividends they can get and whether the company has the cashflows to support it.”

The 19-time English soccer champion’s decision to sell shares in Asia was also prompted by its growing fan base in the region, people familiar with the matter said last month.

United first toured Asia four decades ago and plans to do so again next year. When the club last made the trip, the players were mobbed by supporters wearing replica shirts bearing names of stars like Wayne Rooney and Ryan Giggs.

United’s pretax profit in the year ended June 30 was 29.7 million pounds, compared with a loss of 15 million pounds last year. It’s the second time in six years the club has been profitable.

’Sucked In’

The lack of sustained earnings may repel investors, said Lee King Fuei, a Singapore-based fund manager at Schroders Plc, which oversaw $323 billion as of June 30.

“Institutional investors are unlikely to be interested, while retail investors will be the ones sucked in by the branding and marketing,” he said. “The lack of voting rights is just a kick in the teeth.”

The company hired JPMorgan Chase & Co. and Morgan Stanley as bookrunners for the IPO together with Credit Suisse Group AG, three people with knowledge of the matter said last month. United also picked BOC International Ltd., CLSA Asia-Pacific Markets, CIMB Group Holdings Bhd. and DBS Group Holdings Ltd. as co-lead arrangers for the offering, the people said.

--With assistance from Fox Hu in Hong Kong and Zijing Wu and Tariq Panja in London. Editors: Mohammed Hadi, Philip Lagerkranser

To contact the reporter on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

http://www.businessweek.com/news/2011-09-16/manchester-united-said-to-get-singapore-s-approval-for-listing.html


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[6] Investors cautious on Man Utd's IPO - Stella Lee -Channel News Asia - 02 Sep 2011

SINGAPORE: Manchester United may be one of the best football clubs around but investors will likely sit on the sidelines.

With an initial public offering (IPO) in Singapore expected soon, analysts are now cautioning that listed football clubs generally do not provide good returns.

Others point out that United's financial performance over recent years has been less than stellar.

But for many fans, just owning a piece of United will be enough.

The English club has fanatical support from fans in this region and its expected listing here will probably tap on mass appeal rather than fundamentals.

Currently, there are no sports teams listed in Singapore but in the leisure and entertainment industry, casinos are similar in terms of enterprise value. Yet, United makes a fraction of what casinos here make.

Gabriel Yap, Executive Chairman, GCP Global, said: "In the last five years, (United) they made only 10 million pounds in terms of net profit level." 

United's financial performance is also inconsistent and shareholders are unlikely to see dividends post-IPO.

Mr Yap added: "When you make two years of profit out of the last five years, it is very hard to find sustainable return-on-equity. The player's moods, ability to play, and whether they will get injured again are intangible assets which have to be recognised in the accounts. This amount is actually huge and it ranges between 60 million pounds to 80 million pounds, so as you can see that erodes the profits substantially."

If it is starting to sound like investing in a football team is not a good idea, it is probably because it isn't.

Terence Wong, co-head of Research, DMG and Partners, said: "If you look at the European football club index, it has been flat over the last 10 years." 

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1150766/1/.html



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[5] Man Utd's two-tier IPO plan risks investor yellow card Reuters Asia DEALTALK - Saeed Azhar and Rachel Armstrong Sep 8 2011

DEALTALK-Man Utd's two-tier IPO plan risks investor yellow card Sep 8 2011

Thu Sep 8, 2011 1:16am EDT
* Listing structure plan seen favouring current owners

* SGX under fire for corporate governance compromise

* Listing to be approved this week or next - sources

* Man Utd courting Temasek - sources

* Tells investors it sees 30 pct EBITDA margin - sources (Adds detail, edits)

By Saeed Azhar and Rachel Armstrong

SINGAPORE Sept 8 (Reuters) - Singapore Exchange's coup in luring Manchester United to the city is threatening to turn sour as the bourse comes under fire for plans to let the club list using a structure that will minimise the influence of new shareholders.

The SGX is set to approve the initial public offering of up to $1 billion from the English Premier League champions this week or next, two sources with direct knowledge of the listing said.

The Red Devils have spent the past few weeks courting Asia's major institutional and sovereign investors including Singapore state investor Temasek , said the sources, who were not authorised to talk to the media about the plans.

But the club's plan to use a two-tier system of shares to ensure the Glazer family, which owns soccer's biggest brand, will retain control has some investors and experts calling foul.

"I believe this is a backward step for the SGX to take from the perspective of good corporate governance and minority shareholders' rights," said Mak Yuen Teen, a professor at the National University of Singapore who helped draw up the code of corporate governance for listed companies in Singapore.

"It reflects an inclination towards issuers and controlling shareholders as opposed to institutional and other minority shareholders," he said.

An SGX spokeswoman said the exchange was unable to say anything about the discussions with the club.

"We do not comment on speculation nor about our dealings with individual companies," she said.

Sources with knowledge of the club's early discussions with potential investors say it has steered clear of talking about the structure, flagging instead expectations for underlying profit margins to top 30 percent and its strong Asian fan-base.

Most investors are wary of shareholder structures that make it harder for them to monitor and change a company's management.

"Economic interest and ownership interest are not aligned in these structures, and you can find someone with 4 percent of shares controlling the company, for example," said David Smith, head of Asia corporate governance research at Institutional Shareholder Services.

SPECIAL TREATMENT?

Manchester United wants to raise cash to help reduce a debt pile near $500 million. 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.

Many fans remain unconvinced about the proposal.

"They (the Glazers) will still control the purse strings and the political machinations," said Manchester United season ticket holder Paul Davidson, a teacher.

The club was tipped to list in Hong Kong but lawyers say Singapore, which has struggled to compete with its rival for big ticket listings, may well have been more willing to accommodate Manchester United's demands.

"I wouldn't be surprised if the SGX is showing them some flexibility, they do tend to be more willing than most of the other exchanges," said one lawyer, who asked not to be identified as his firm may become involved in the deal.

Any evidence the exchange has given special treatment to one particular company could be damaging to the SGX in the long-term.

"The general principle is quite clear. No regulator or stock exchange should bend their rules for specific cases such as prestige listings or large listings. That is a very bad precedent to set," said Peter Taylor, Asian equities investment manager for Aberdeen Investment Management without directly commenting on Manchester United's reported plans.

RISK OF INVESTOR TURN-OFF?

Full details of the IPO are yet to be disclosed but sources have said some of the shares issued will be a two-tier share structure.

Lawyers say it is unlikely the club will go down the route of having the two-tier A-share/B-share structure seen in countries like the United States, where some ordinary equity shares carry no voting or fewer voting rights.

For a start, that is banned by the Singapore Companies Act which states there should be one vote, and one vote only per equity share.

But lawyers say it is likely the club will instead make a significant part of its offering in preference shares -- equities that carry no voting rights but get priority over ordinary shares for dividend payments and in the event of liquidation.

SGX CEO Magnus Bocker indicated such a structure might be feasible in a television interview on Thursday.

While the principle of one vote per ordinary equity share is likely to stay in place for the time being, companies can vary their capital structure with preferred equity instead, Bocker said.

"Preference shares are underestimated," he told CNBC.

Manchester United may also have to face the prospect that the share structure could dent the value of their $1 billion offering, which has raised eyebrows for being overly optimistic from the outset.

The Glazers are deeply unpopular with many of Manchester United's estimated 333 million global fans after buying the club in 2005.

"Clearly the degree of control by one majority shareholder has to be a major concern for any conventional investor thinking of purchasing shares primarily seeking a return on investment," Duncan Drasdo, chief executive of the Manchester United Supporters Trust, told Reuters.

"In fact perhaps they should seek medical advice before they seek financial advice given the reaction we've seen from the financial press so far." (Additional reporting by Ossian Shine in SINGAPORE and Elzio Barreto in HONG KONG; Editing by Lincoln Feast and Michael Flaherty)

Reuters Asia:
http://www.reuters.com/article/2011/09/08/dealtalk-manu-idUSL3E7K80II20110908?feedType=RSS&feedName=cyclicalConsumerGoodsSector

Times of India:
http://timesofindia.indiatimes.com/sports/football/epl/epl-news/Manchester-Uniteds-two-tier-IPO-plan-risks-investor-yellow-card/articleshow/9907326.cms

Yahoo Sport: Singapore IPO plans infuriate Man Utd fans
http://uk.eurosport.yahoo.com/08092011/2/singapore-ipo-plans-infuriate-man-utd-fans.html

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[4] Manchester United IPO - Financial Times - Lex
Manchester United Financial Times (London, England) - Sunday, September 4, 2011

You do not have to be a fan of football to invest in the forthcoming initial public offering of Manchester United . But you will need to be a fan of the Glazer family, which bought England's most successful club in 2005 for a highly leveraged £790m. As potential investors await details of the club's IPO, they should cast a cold eye over its 2010/11 accounts, released last week. The numbers offer plenty of reasons for the Glazers to want to sell shares in Manchester United , and none at all for rational investors to buy them.

The most striking revelation is that Manchester United is not terribly profitable. The Glazers' net profit for the year to June 30 was only £9.8m - a poor return on group revenue of £331m. Interest payments of £43m - the issue that enrages fans - consumed two-thirds of the club's operating profit, while accounting measures such as an unrealised £16m foreign exchange gain flattered the bottom line. True, the pre-tax profit of £30m was an improvement on the loss of £15m the previous year. Still, the meagre takeaway for the owners suggests that a reported valuation of $3bn for the club is wildly optimistic. Potential investors may also be asked to accept non-voting shares as part of the Singapore stock exchange listing - evidence of the Glazers' reluctance to cede any degree of control. An inflated valuation and a two-tier ownership structure would be a turn-off in any other business.

But football is unlike any other business (as investors who lost in the listings craze of the 1990s will recall at their leisure). Given the club's success on the pitch, continued investment in top players, and shrinking acquisition debt, it is time to stop moaning about the Glazers as custodians of English football's most glittering prize. Those thinking of investing in the IPO, however, should realise that they would not be buying a piece of football history. They would be buying a piece of the Glazers.

E-mail the Lex team in confidence at lex@ft.com

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[3] Reuters Insider - Nigel Hilditch - Aug 24 2011

Scepticism over the high price the Glazers are pushing for from Reuters Insider video here: http://ping.fm/WLWIx
 

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[2] Man Utd's IPO not "all that attractive", say analysts - Channel News Asia - Amanda Feng - Aug 19 2011
 
The Glazers IPO plans for Manchester United are take a panning in the financial press over excessively high valuation.

Man Utd's IPO not "all that attractive", say analysts
By Amanda Feng 
Channel News Asia: 19 August 2011 2122 hrs

SINGAPORE: Despite the buzz surrounding English Premier League champions Manchester United's reported application to list on the Singapore Exchange (SGX), analysts said that the prospect of an IPO does not look "all that attractive".

Investors might be enticed by the 'wow' factor of the world's probably best known football club listing in Singapore, but analysts question whether investing in the club will bring good returns.

Vice President and Head of Research at SIAS Research, Roger Tan, said: "Supporting a football club is different from investing in one. At the end of the day, investors buy Manchester United listings or invest in the club itself for some financial returns.

"They will have to look into the objective of United's listing - their financial statements, balance sheets and profit and loss statements, and we're not going to see a very good number."

He added: "If the club is debt-laden and the objective is to pay off those debts, to me, it's not very attractive."

United, England's most successful club, has plans to apply for a $1 billion initial public offering (IPO) and the proceeds will go towards paring the club's debts as well as grow its business in Asia.

United fans in Singapore, however, are excited at the prospects of "owning a piece of the club".

Some supporters point to the success of United's 500-milion-pound bond issue last year, which was twice oversubscribed.

"The money generated from the IPO could be used to reduce the club's debts or give the manager more funds for purchase of new players, which will make the club stronger on the field or financially to challenge for more trophies," said Jame Lim, a committee member of the unofficial Manchester United Singapore Supporters Club (MUSG) which has nearly 7,000 members.

"Hopefully with the listing, it will mean United will visit Singapore or Asia more often, something all its fans will be looking forward to," added Lim.

When contacted by Channel NewsAsia, both the SGX and Credit Suisse - said to be the global coordinator for the deal - declined comment.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1147983/1/.html

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[1] Man Utd taps up Peter Lim for IPO - Financial Times - Kevin Brown in Singapore Aug 19 2011
 
The club has a 300m-strong global fan base, with 190m in Asia
 
Peter Lim, the Singaporean billionaire who tried to buy Liverpool Football Club last year, has been approached to act as a cornerstone investor in a $1bn initial public offering by Manchester United , but has doubts about the valuation, according to people with knowledge of the transaction.
 
Temasek, the Singapore state investment agency, has also been approached to invest in the IPO, expected to take place in Singapore in the fourth quarter of the year, but has made no decision. Manchester United is expected to offer 25-30 per cent of its shares, valuing the English Premier League champions at more than $3bn.
 
Mr Lim, who held talks in Singapore last month with David Gill, Manchester United’s chief executive, is understood to have left open a decision on whether to invest. However, he has told associates that “it all depends on the valuation”, according to a person with knowledge of his thinking.
 
Others involved with Mr Lim have said the price looks “rich”, compared with independent valuations. Forbes said earlier this year that Manchester United was worth $1.86bn, while the Red Knights – a group of supporters who tried to buy the club last year – say it is worth not much more than £1bn ($1.6bn).
 
Mr Lim is thought to have talked to the Red Knights last year about latching on to their take­over attempt, but this came to nothing and the Red Knights’ approach was rejected.
 
Mr Lim’s hesitation this time around suggests that Manchester United may not find it easy to realise the high valuation placed on the club by the Glazer family, its US-based owners, who bought it in 2005 in a £790m leveraged buy-out. Manchester United made an operating loss of £79m last year, and has gross debt of £515m.
 
However, the club boasts a fanbase of more than 190m people in Asia, out of nearly 300m globally, and have been touring Asia for decades, building up a strong position in football merchandising in the region.
 
Mr Lim is known in Singapore as the “Remisier King”, reflecting his accumulation of an initial fortune as an intermediary between stockbrokers and clients.
He has a reputation as a savvy investor, and has commercial links with Manchester United through an interest in a chain of themed restaurants and bars in Asia that are based on the club. He is well known in Singapore, but rarely speaks to the media.
 
On Friday UK-based sports car maker McLaren Automotive said Mr Lim had joined its board with immediate effect after making a “significant investment” in the company, which also runs the McLaren Formula One team.
 
Manchester United is understood to have submitted its listing application to the Singapore Exchange in preliminary form, although further papers have yet to be delivered. The club said on Friday it did not comment on ownership issues, adding that the meeting between Mr Gill and Mr Lim was exclusively about licensing issues.
 
The SGX declined to comment, as did Temasek. Mr Lim could not be reached. The full list of banks involved in the IPO emerged on Friday, with Credit Suisse Group as a global co-ordinator, JPMorgan Chase and Morgan Stanley as bookrunners. China’s BOC International, Hong Kong’s CLSA Asia-Pacific Markets, Malaysia’s CIMB and Singapore’s DBS will be co-lead arrangers.
 
Additional reporting by Roger Blitz in London 
http://www.ft.com/cms/s/0/c2e047d2-ca6d-11e0-a0dc-00144feabdc0.html#axzz1VVXuCiwx



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