Manchester United IPO and its dual-share structure

A follow-up for "Manchester United ... IPO??"--and I still don't find the IPO appealing. Especially its dual-share structure which will contain a block of shares with voting rights and one without?! Yeah, hardly attractive.



Manchester United chose Singapore over Hong Kong for an Asia float because of the city-state's more flexible conditions and proximity to their passionate Southeast Asian fans, a source said Wednesday.



The English football champions are opting for a dual-share structure, which will allow the club's owners - the US-based Glazer family - to stay in charge of key decisions, the source who is close to the planned listing told AFP.



Hong Kong, which is the world's biggest initial public offering market last year, was the first choice for the Glazers but exchange regulations there do not allow a two-tier structure, the source said.



"The rationale is because sports clubs are quite different from most companies," said the source, who did not want to be named.



"Allowing control ensures long-term decision-making and strategic planning. That structure is important for the successful operation of the club."



The proposed dual-share structure will contain a block of shares with voting rights and one without, according to the source.



One of the advantages of such a structure is that it allows the owners to make quick decisions, such as on player transfers.



A listing in Singapore will also position the 19-times English champions closer to their fanatical supporters in Southeast Asia, where millions follow the club religiously, the source said.



"Singapore is nearer to Southeast Asia, where the fan base is more fervent. If you have it in Hong Kong, people may just construe China as 'it' but China is just part of the equation."



Local media reports said Manchester United could raise $1 billion dollars from the IPO of 30 per cent of the club's shares which would value the company at more than $3 billion.



United were ranked by business magazine Forbes earlier this year as the world's most valuable football club, worth $1.86 billion.



Analysts said the plans to list in Singapore did not come as a surprise.



"I suppose it's not surprising they are looking to list in Asia," said Matthew Gorman, the Singapore-based head of corporate with global law firm Stephenson Harwood.



"The levels of liquidity here in Asia are better at present than in Europe/US. They also recognise that Asia is where a lot of their fans are," he told AFP.



Asia accounts for 190 million of the estimated 330 million United followers worldwide, and most of the club's sponsors are based in Asia or generate a large part of revenue from the region.



Snaring United was a coup for Singapore, which has been in rivalry with Hong Kong as a regional financial centre.



Singapore Exchange chief executive Magnus Bocker said last week Singapore was a distinct market from Hong Kong which offers a direct springboard into the vast China market.



"Hong Kong has been very successful in offering listings for companies that want to have a very Chinese focus, where you reach into China, and they've been very good at that," Bocker was quoted as saying by Dow Jones Newswires.



"I think Singapore has a very strong offering for companies that want to be much broader, maybe reaching out to India, reaching out to Southeast Asia, but also reaching out to China... our offering is therefore broader in a different way."


From Channel NewsAsia, "Man Utd opts for two-tier IPO listing".



Manchester United chose Singapore over Hong Kong for an Asia float because of the city-state's more flexible conditions and proximity to their passionate Southeast Asian fans, a source said on Wednesday.





The English football champions are opting for a dual-share structure, which will allow the club's owners - the US-based Glazer family - to stay in charge of key decisions, the source who is close to the planned listing told AFP.



Hong Kong - the world's biggest initial public offering market last year - was the first choice for the Glazers but exchange regulations there do not allow a two-tier structure, the source said.



'The rationale is because sports clubs are quite different from most companies,' said the source, who did not want to be named.



'Allowing control ensures long-term decision-making and strategic planning. That structure is important for the successful operation of the club.'



The proposed dual-share structure will contain a block of shares with voting rights and one without, according to the source.



One of the advantages of such a structure is that it allows the owners to make quick decisions, such as on player transfers.



A listing in Singapore will also position the 19-times English champions closer to their fanatical supporters in Southeast Asia, where millions follow the club religiously, the source said.



'Singapore is nearer to Southeast Asia, where the fan base is more fervent. If you have it in Hong Kong, people may just construe China as 'it' but China is just part of the equation.'



Local media reports said Manchester United could raise US$1 billion from the IPO.



United were ranked by business magazine Forbes earlier this year as the world's most valuable football club, worth US$1.86 billion.



Analysts said the plans to list in Singapore did not come as a surprise.



'I suppose it's not surprising they are looking to list in Asia,' said Matthew Gorman, the Singapore-based head of corporate with global law firm Stephenson Harwood.



'The levels of liquidity here in Asia are better at present than in Europe/US. They also recognise that Asia is where a lot of their fans are,' he told AFP.



Asia accounts for 190 million of the estimated 330 million United followers worldwide, and most of the club's sponsors are based in Asia or generate a large part of revenue from the region.


From Business Times, "Man Utd pick two-tier S'pore listing: source".


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