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What does a potential $1bil Manchester United SGX IPO means to MUFC fans

Well I wasn’t expecting that SGX was able to attract one of the biggest football club in the world, Manchester United to list on the Singapore Stock Exchange.

They key thing to note is that we do not have much information

  1. Talks seems to be in an advanced stage.
  2. We still do not know how much of the club will be listed. The portion touted around is that it will be in the region of 25% to 30%
  3. SGD 1 bil will translate to roughly 500 mil pounds. The amount of debts currently on balance sheet stands at around 500 mil pounds. Raising this amount and clearing the debts could potentially put the club on a solid footing.
  4. We blog about Manchester United’s financial footing in the past (analysis here). We mentioned that annual revenue comes to 300mil but majority were sucked away by 57 mil in interest payment. Clearing this annual interest payment goes in a long way to ensuring the club have cash flow to invest in long term growth.
  5. Glazers were said to be looking to sell United for 1.6 bil pounds. 25% of this is around 400 mil pounds. Now this ipo may be 20% over what is already an overvalued price.
  6. Essentially this will keep the Glazers as the majority shareholders yet still suck the company dry.
  7. For fans this may be the near term way to ensure some sensible survivability for their soccer club.

We have to see more details before we can make some concrete analysis. But my initial thoughts is that this IPO is preying on the club’s popularity in Asia to suck money for the Glazers at tremendously overvalued prices.

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