Manchester United's initial public offering (IPO) did not yield the expected proceeds, as the price of the shares offered to investors on the New York Stock Exchange had to be cut ahead of the launch on Aug. 10. Due to skepticism from investors, the shares were listed at $14, below the range of $16 to $20 set by the underwriters.
The IPO still raised about $234 million and valued the British football club at $2.3 billion, making it the most valuable in the world. The IPO involved 16.7 million Class A shares, about 10 percent of its stock. The Glazers, the American family that purchased Manchester United in 2005 for about $1.47 million, remain in control of the club.
-Appetite in the shares was undermined by skepticism about the valuation of the club, and the fact that Class A shares offered in the deal have only one voting right, compared with 10 voting rights for the Class B shares held by the Glazers. This was one of the reasons for the failure of earlier plans to get Manchester United listed in Hong Kong and in Singapore. Some analysts described the shares as a fan collectible, rather than an investment.
Furthermore, some aspects of the IPO badly angered Manchester United supporters, who were already unhappy with the Glazers for buying the club in a highly leveraged deal. Many of them think that the club's debt, which stood at £423.3 million (€533.8m-$668.6m) in March, has been preventing the club from purchasing top-of-the-bill players.
The same fans were equally unimpressed that the proceeds from the IPO will not be entirely used to reduce the debt, as initially announced. Instead, only half of the proceeds will be used to pay down the club's debt, while the Glazers are to pocket the other half.
The Manchester United Supporters Trust even called for a global boycott of products sold by the club's sponsors. It did appease some of the fans that the club managed to sign Robin van Persie, the Dutch striker who previously shone at Arsenal, for a reported price of £23 million (€29.0m-$36.3m).
It emerged a few days after the IPO that Soros Fund Management, an investment fund of the billionaire investor George Soros, owned 7.85 percent of Manchester United's Class A shares, representing about 1.9 percent of the entire club.
