The highly anticipated initial public offering of Manchester United (NYSE: MANU) is not being given much respect. The offering was supposed to be at $16 to $20 per share for the extremely popular soccer team, but the deal priced at just $14 per share. The 16.7 million shares being sold will give an implied market value of $2.3 billion and that is far less than the $3 billion that was previously discussed.
The question to ask is whether the Manchester United is really the next Facebook Inc. (NASDAQ: FB) IPO. It has 600 million fans, it is under tight control by the Glazer family and it is full of hype. Perhaps the discounted price will keep some interest in the shares, but this dual class listing in New York is not allowed in London, where Manchester United should be based for its home market trading.
Institutions apparently put pressure on the deal to be priced lower so that they would not have another Facebook situation. We would also note that Morningstar was said to have a $10 per share valuation on Manchester United. There is also a concern that revenue may be declining, but that probably depends on the health and record of the team through time.
As a reminder, Manchester United was bought by the Glazers back in 2005 for just under $1.5 billion. Now the Glazers can monetize part of their investment and hopefully get some of the soccer club’s debt down to lower levels.
We would note that some old quote systems may still pull up the ticker “MANU” under the old Manugistics.
UPDATE: Manchester United opened at $14.05 this morning.
JON C. OGG
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