Rags IPO faltering at first hurdle

[Beeks]

Seems noone wants to invest...

http://www.marketwatch.com/story/manche ... atest_news

For sale: world-famous company that’s highly leveraged with anti-takeover provisions and no dividend or stock buyback plans in sight.

To which potential buyers in Hong Kong, Singapore and now, reportedly, the U.S., have replied: No, thanks.

At least that’s according to a published report in the Financial Times Wednesday, which said the Manchester United initial public offering is on hold.

In interests of full disclosure, this author is a fan of a soccer club that counts Manchester United as a bitter rival. But that’s not really the point — the club is clearly one of the dominant teams in the English Premier League, despite cross-town rival Manchester City winning the league title this year, and its success on the pitch, as the Brits say, looks to continue for some time.

The issues surround the team’s recent owners, the Glazer family, and the debt they’ve loaded onto the franchise: 423 million pounds against 259 million pounds of equity. The prospectus says they want the cash to pay off debt carrying interest rates north of 8%. And remember, this isn’t some new start-up — this is a company that’s been around for more than a century.

Plus, as an “emerging growth company” per the new JOBS Act rules — quite an achievement in labeling for one founded in 1878 — it won’t have to attest to the effectiveness of its internal controls for up to five years.

Of course the investment case carries some valid points. In the U.K., BT Group BT -3.20%   aggressively bid for television rights, in the process completely shutting out Disney’s DIS +0.29%   ESPN and making inroads to BSkyB’s UK:BSY +1.11%  local broadcasting dominance of the sport. (BSkyB is partly owned by News Corp, which also owns MarketWatch, the publisher of this report.)

There’s also the Premier League’s and Manchester United’s growing ability to tap into demand to watch soccer in Asia, as its own broadcast channel reaches 54 countries. Plus, the club’s mobile and “new media” revenue is surging, as is sponsorship and licensing revenue.

But even so, operating margins were basically flat in the nine months ending March 31, at 21%. Expenses also are growing, and the club hasn’t of late been able to repeat the feat of developing home-grown talent like David Beckham and Paul Scholes — which is important to its finances, because it forces the club to buy players from other clubs at a premium. The club also is competing against rivals like Chelsea and Manchester City whose oil-rich owners show little regard for turning a profit.

Yes, it’s true that there’s growing market uncertainty, not making it the best of times for any initial public offering. And yet the reason for the market uncertainty, largely the European debt situation, also directly threatens the revenue and profit potential of Manchester United. Only Wednesday, the U.K. government’s statistician reported the economy in the second quarter shrank 0.7%.

The fans may sing “We love United, we do,” but investors most certainly do not

[Beeks]

From the FT

Quote:
Man Utd pauses US listing plans

By Arash Massoudi in New York, Roger Blitz and Anousha Sakoui in London

Manchester United has temporarily paused plans to launch its $300m initial public offering in the US, where market volatility has soared in recent days as macroeconomic fears hit share prices.

The English football club had been looking to begin its investor roadshow as early as Monday of this week, with the aim of pricing and listing its shares in early August.

But United and its bankers are to reconsider when they will begin meeting potential investors later this week, said people familiar with the situation.

Jefferies, the investment bank leading the book running for United’s IPO, declined to comment.

The pause comes as US markets have been unsettled by further concerns over debt and economic growth in the eurozone, with the S&P 500 index falling 2 per cent since the start of the week.

The people familiar with United’s IPO plans suggested the current delay had to do with market conditions.

The Vix index, a widely monitored measure of implied volatility on the US market, has risen by more than 23 per cent since Monday. Bankers consider a sudden rise in the Vix as a sign of potential risk aversion from investors, making them less likely to participate in new offerings.

It was not immediately clear if United would still attempt to list its shares before the current IPO window closes in mid-August, ahead of the traditional market lull that runs through to the US public holidays in early September.

The club declined to comment.

It has been widely speculated that the club, which is owned by the US-based Glazer family, intends to use the proceeds of the fundraising to pay down the club’s net debt of £425m.

Sir Alex Ferguson, United’s manager, has taken his team on a preseason tour of the Asia, which the club’s owners, the US-based Glazer family, have always seen as a market ripe for exploitation.

But, since announcing its intention to go public last year, Manchester United has been forced to abandon plans to list in Hong Kong and then in Singapore after demand for its shares fell short. It had looked to raise as much as $1bn as part of its aborted Singapore float.

Credit Suisse, JPMorgan Chase, Bank of America and Deutsche Bank are the other banks on the IPO syndicate but all declined to comment.
http://www.ft.com/cms/s/0/c57a011a-d...#axzz21eu4cVNw

[Beeks]

[youtube]gq4meOlh_-0[/youtube]

[ThisIsOurCity]

A regular and reliable commentator on rag finances on Twitter Andy Green, ‏@andersred,
reckons that "paused" actually means binned altogether.

[Crossie]

tick tock

[blues-clues]

I guess those Glazer boys will be looking to consolidate all their debts into one easy to manage payment.....now where is that letter from Ocean Finance!

It would be interesting to know how much they have spent on all this IPO nonsense. I wonder who their financial advisor is but I guess it is a sign of the times and how bad it is in Salford. Greece gets 300bn Euros and everyone knows they wont be able to pay it back but with all their "history and success" FC Salford cannot raise £200m. Carry on boys great work!

[lets all have a disco]

I just hope there isnt many other filthy rich geezers willing to throw money at them.

[feedthegreek]

I just hope there isnt many other filthy rich geezers willing to throw money at them.

dont think the glazers would sell till they have wiped all of their debt off, then they might make a killing.

[ashton287]

I just hope there isnt many other filthy rich geezers willing to throw money at them.

At some point it will happen. But taggart and his "influence" will be gone by then so it just won't matter.

[BobbyDazzler]

listening to talkshite this morning, it was compared to investing in gold because the shares don't pay a dividend. Then someone pointed out that your gold isn't half a billion pounds in debt.

[Ted Hughes]

listening to talkshite this morning, it was compared to investing in gold because the shares don't pay a dividend. Then someone pointed out that your gold isn't half a billion pounds in debt.

Hahahaha.

Like it.

[Alex Sapphire]

It would be interesting to know how much they have spent on all this IPO nonsense.

prospectus says:

"Exceptional items of £6.4 million were recognized for the nine months ended March 31, 2012, relating to £4.8 million of professional advisor fees in connection with a proposed public offering of shares ... We had no exceptional items in the nine months ended March 31, 2011. "

[Beefymcfc]

At the bottom of the prospectus, it showed the Glazer's getting a loan off the club at around 5% but then loaning a similar amount back to the club at around 9%.

It summed the whole Glazer/Rag affair up for me.

[blues-clues]

It would be interesting to know how much they have spent on all this IPO nonsense.

prospectus says:

"Exceptional items of £6.4 million were recognized for the nine months ended March 31, 2012, relating to £4.8 million of professional advisor fees in connection with a proposed public offering of shares ... We had no exceptional items in the nine months ended March 31, 2011. "

Good man -cheers. I've not read the prospectus just in case it was so convincing that I was tempted to spend £3.87 I dont have buying up the whole issue

So that was last year's costs! Probably the same again this year then! If only I had a golden goose that I could plunder for £10 million just to give to Goldman Sachs on absolutely fuck all.

[Beeks]

This now gets better..the IPO is back on..yet with a new amendment by the Glazers that they WILL NOT be using the majority of capital raised to pay off the debt..some of the more financially astute twitter experts are saying if they reach their target only 73mil of their 425mil debt will be recovered

[Beeks]

So the shares are being sold at $16-20 a pop..with no voting rights and at little benefit to the club

What an attractive offer hahahaha

[blues-clues]

This now gets better..the IPO is back on..yet with a new amendment by the Glazers that they WILL NOT be using the majority of capital raised to pay off the debt..some of the more financially astute twitter experts are saying if they reach their target only 73mil of their 425mil debt will be recovered

That is understandable. They are now indicating significant falls in revenue for the latest full year of trading and increased expenditure on players and wages. This was expected given the huger fall in cash reserves over the last 9 months. They needs this to work to provide working capital....crikey scary stuff! No mention yet of plans to settle the outstanding debts that come due over the next 4 years if they do not use this money....be fookin funny if the IPO dosh gets used up to buy Van Persie who then gets injured in his first game!

[Blue Jam]

Why pay £16 for kne share of shit? www.bbc.co.uk/news/business-19057547

[zuricity]

That is understandable. They are now indicating significant falls in revenue for the latest full year of trading and increased expenditure on players and wages. This was expected given the huger fall in cash reserves over the last 9 months. They needs this to work to provide working capital....crikey scary stuff! No mention yet of plans to settle the outstanding debts that come due over the next 4 years if they do not use this money....be fookin funny if the IPO dosh gets used up to buy Van Persie who then gets injured in his first game!

Won't get to the starting gate, never mind the first hurdle

[Beeks]

This now gets better..the IPO is back on..yet with a new amendment by the Glazers that they WILL NOT be using the majority of capital raised to pay off the debt..some of the more financially astute twitter experts are saying if they reach their target only 73mil of their 425mil debt will be recovered

That is understandable. They are now indicating significant falls in revenue for the latest full year of trading and increased expenditure on players and wages. This was expected given the huger fall in cash reserves over the last 9 months. They needs this to work to provide working capital....crikey scary stuff! No mention yet of plans to settle the outstanding debts that come due over the next 4 years if they do not use this money....be fookin funny if the IPO dosh gets used up to buy Van Persie who then gets injured in his first game!

They reckon the IPO is worth $300 mil..they value the club at 3 Billion..twice what an independent has valued it as

Of the $300 mil..Glazers will pocket half..50 mil for transfers in 2012 of which 20 mil has been spent already..and the rest is to service the debt..they literally don't give a fuck about nited..I love them