7:55 p.m. | Updated Manchester United had hoped to add to its soccer successes with a strong debut as a newly public company on Friday. But its initial public offering fell short of that aim.
On Friday, their first day of trading on the New York Stock Exchange, the soccer team’s shares closed flat at their offer price of $14, after having opened only 5 cents above that level.
The stock’s performance appeared to meet low expectations, after underwriters for the club priced the offering on Thursday below an expected range of $16 to $20 a share.
The team’s offering, which raised $232.4 million, was one of the biggest this year. The offering values the franchise over all at about $2.3 billion.
Manchester United has returned to the public markets during a year in which stock offerings have largely struggled. About $29.6 billion has been raised from initial stock sales through the end of July, according to data from Renaissance Capital, roughly 5 percent higher than at the same time last year. But nearly two-thirds of this year’s proceeds came from Facebook’s gigantic offering.
By going public — while remaining firmly under the control of its majority owner, the Glazer family — Manchester United is hoping to challenge the history of sports teams that have flailed when traded on stock exchanges.
Ed Woodward, Manchester United’s vice chairman, emphasized that the newly public company was less a team than a branding empire — with revenue from broadcasts and merchandise sales — built around one of the most successful soccer clubs in memory.
He said that officials from six sports leagues from around the world had asked how Manchester United officials built up an expansive commercial operation.
“This feels like it’s a fantastic opportunity,” he said in a telephone interview on Friday. “The story has been incredibly well received, especially in the U.S.”
Mr. Woodward recalled heading into meetings during Manchester United’s road show over the last two weeks that were standing room only, with potential investors clamoring for the team’s signature red-and-white gear.
But by Thursday afternoon, the company and its underwriters looked at the offering book and decided to accommodate what Mr. Woodward called “very-high-quality institutional investors” who were willing to buy in bulk at $14.
Skeptics of the offering pointed not only to the tortured history of publicly traded sports teams but also the specifics of Manchester United’s offering. The team raised money to pay some of the debt it incurred when Malcolm Glazer bought the club in 2005.
The Glazers also sold some of their holdings in the offering, though they are retaining control by holding onto a class of stock that carries 10 times the voting rights of the ordinary shares.
The Boston Celtics went public in 1986 and the Cleveland Indians in 1998. But the stocks struggled, and both were taken private in the last decade. Many BritishPremier League soccer clubs were publicly traded at one point or another, and performed miserably.
Manchester United fans have also expressed dismay over the offering, with one group having organized a letter-writing campaign complaining about the Glazers’ cashing out some of their holdings through the stock sale.
Mr. Woodward said that Manchester United remained committed to strengthening its team, with improvements in its commercial revenue making more cash available to attract top-flight players. “Through growing these business lines, we’ll have huge firepower to make player acquisitions,” he said.
http://dealbook.nytimes.com/2012/08/10/manchester-united-opens-at-14-05-in-first-day-of-trading/
:shotsfired:
On Friday, their first day of trading on the New York Stock Exchange, the soccer team’s shares closed flat at their offer price of $14, after having opened only 5 cents above that level.
The stock’s performance appeared to meet low expectations, after underwriters for the club priced the offering on Thursday below an expected range of $16 to $20 a share.
The team’s offering, which raised $232.4 million, was one of the biggest this year. The offering values the franchise over all at about $2.3 billion.
Manchester United has returned to the public markets during a year in which stock offerings have largely struggled. About $29.6 billion has been raised from initial stock sales through the end of July, according to data from Renaissance Capital, roughly 5 percent higher than at the same time last year. But nearly two-thirds of this year’s proceeds came from Facebook’s gigantic offering.
By going public — while remaining firmly under the control of its majority owner, the Glazer family — Manchester United is hoping to challenge the history of sports teams that have flailed when traded on stock exchanges.
Ed Woodward, Manchester United’s vice chairman, emphasized that the newly public company was less a team than a branding empire — with revenue from broadcasts and merchandise sales — built around one of the most successful soccer clubs in memory.
He said that officials from six sports leagues from around the world had asked how Manchester United officials built up an expansive commercial operation.
“This feels like it’s a fantastic opportunity,” he said in a telephone interview on Friday. “The story has been incredibly well received, especially in the U.S.”
Mr. Woodward recalled heading into meetings during Manchester United’s road show over the last two weeks that were standing room only, with potential investors clamoring for the team’s signature red-and-white gear.
But by Thursday afternoon, the company and its underwriters looked at the offering book and decided to accommodate what Mr. Woodward called “very-high-quality institutional investors” who were willing to buy in bulk at $14.
Skeptics of the offering pointed not only to the tortured history of publicly traded sports teams but also the specifics of Manchester United’s offering. The team raised money to pay some of the debt it incurred when Malcolm Glazer bought the club in 2005.
The Glazers also sold some of their holdings in the offering, though they are retaining control by holding onto a class of stock that carries 10 times the voting rights of the ordinary shares.
The Boston Celtics went public in 1986 and the Cleveland Indians in 1998. But the stocks struggled, and both were taken private in the last decade. Many BritishPremier League soccer clubs were publicly traded at one point or another, and performed miserably.
Manchester United fans have also expressed dismay over the offering, with one group having organized a letter-writing campaign complaining about the Glazers’ cashing out some of their holdings through the stock sale.
Mr. Woodward said that Manchester United remained committed to strengthening its team, with improvements in its commercial revenue making more cash available to attract top-flight players. “Through growing these business lines, we’ll have huge firepower to make player acquisitions,” he said.
http://dealbook.nytimes.com/2012/08/10/manchester-united-opens-at-14-05-in-first-day-of-trading/
:shotsfired:
