The football team will offer 16.67 million shares at between $16 (?10.17) and $20 each, valuing the Manchester United at up to $3.3bn.An announcement by the Glazer family confirms the intention to raise around $300m, half of which will be used to pay off some of Manchester United’s ?400m debts and the rest going to the Glazer family. Manchester United has been struggling with massive debts since it has been acquired by the family of Florida-based entrepreneur Malcolm Glazer and his family in 2005. According to analysts, the IPO may be a “tough sell” in the US, given the lack of publicly-traded sports teams to compare Manchester United against, and also given that many Americans don’t consider football a top sport. “It could be challenging to justify such strong multiples for a company that needs to send a lot of money to generate success,” says Ken Perkins, an analyst with Morningstar. “Even if their performance is good, their price may be a bit high.” The club’s S-1 filing shows that revenue at the club for the fiscal year 2012 is expected to be between ?315m and ?320m, down three to five per cent on last year. Operating expenses are also expected to increase four to five per cent as a result of a jump in player and staff compensation. The shares are based on earnings of a range of ?21m to ?23m in the year just ended, making the price-to-earnings ratio at 95x ? very steep, says Perkins. To help the IPO, Manchester United’s owners will go on a two-week investor road show with stops expected in the US, Europe and Asia. Will you be investing in this entrepreneurial football club?
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