The listing will be one of the highest profile IPOs on the sluggish New York market since Facebook Inc. raised $16 billion in May. The decision to select New York, rather than return to the London Stock Exchange, underlines the club's global focus and comes after it scrapped plans to raise up to $1 billion in a Singapore IPO. Manchester United owners, the Florida-based Glazer family, reportedly began their IPO deliberations focused on Hong Kong. Joel and Avram Glazer are co-chairmen of Manchester United, whose CEO is David Gill.
Manchester United will sell an unspecified number of Class A shares for up to $100 million, according to preliminary F-1 documentation which gives the issuer flexibility to change the amount targeted. The timing of the sale wasn't specified.
Manchester United bills itself as the world's most popular club, with more than 659 million supporters, according to a survey conducted for the company by the Kantar research unit of WPP Group plc. It has won 60 trophies in its 134-year history and in the 2010/2011 season it reached 4 billion viewers, the club said in documentation filed late Tuesday, July 3.
The club derived its £331.4 million in 2011 revenue from commercial tie-ups, broadcasting rights, and ticket sales, with a small but growing component from new media and mobile telephony. Its 2011 net profit from continuing operations was just under £13 million, while Ebitda was £109.5 million.
"We believe that we are one of the world's most recognizable global brands with a community of 659 million followers. The global sports industry is expected to grow from $119 billion in 2011 to $145 billion by 2015. Manchester United is at the forefront of live football, which is a key component of this market," the company said.
Manchester United is incorporated in the Cayman Islands with its main offices at Old Trafford in Manchester, northwest England. It said it is classified as an "emerging growth company" under the 2012 Jumpstart our Business Startups Act, meaning it only has to provide two years of audited accounts and it is exempt from the Sarbanes-Oxley auditor attestation requirement relating to internal financial reporting controls. It will lose its "emerging growth company" status, which lowers its reporting requirements for up to five years, if its revenue exceeds $1 billion.
Risk factors it highlighted include competition for key players from deep-pocketed rivals, the potential for negative publicity affecting its brand and reputation and a downturn in its sporting performance.
"In the Premier League, recent investment from wealthy team owners has led to teams with deep financial backing that are able to acquire top players and coaching staff, which could result in improved performance from those teams in domestic and European competitions," it said.
Its cross-town rival Manchester City, the long-term underdog, in May stole a march on United to become champions of the Premier League after owner Mansour Bin Zayed Al Nahyan, an Abu Dhabi sheik, invested in new players.
The Glazer family will retain control of Manchester United through its B shares.
They plan to use the proceeds of the IPO to reduce Manchester United's debt, which as of March 31 stood at about £423.3 million, a level which has been heavily criticized by Manchester United fans.
The Glazer family, owners of the National Football League's Tampa Bay Buccaneers, bought Manchester United off the London Stock Exchange for £790 million in 2005.
In March 2010, amid continued concern about the company's debt, a group of wealthy fans calling themselves the Red Knights pondered an unsolicited bid for Manchester United before retreating.
As recently as February, a U.K. newspaper reported that the Qatar royal family was contemplating a £1.5 billion offer.
Lawyers at Latham & Watkins LLP, including Marc D. Jaffe and Ian D. Schuman, are providing legal advice to Manchester United. Jefferies & Co. LLC, Credit Suisse Group, JPMorgan & Co., Bank of America Merrill Lynch and Deutsche Bank AG are handling the IPO. The issuers are taking legal counsel from Michael P. Kaplan and John B. Meade at Davis Polk & Wardwell LLP and Mitchell S. Nusbaum and Christopher R. Rodi at Woods Oviatt Gilman LLP.
PricewaterhouseCoopers LLP is Manchester United's auditor.
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