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The Glazers' IPO plans for MUFC take a panning in the financial press over excessive valuation

The Glazers IPO plans for Manchester United are taking 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

Kevin Brown in Singapore
August 19, 2011 7:01 pm
Man Utd taps up Peter Lim for IPO
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 

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