Man United IPO unlikely to lure Arab buyers

Ex-Portsmouth owner Sulaiman Al Fahim says club investment is too risky to attract Arab backers
Man United IPO unlikely to lure Arab buyers
United is expected to start drumming up investor interest in the listing next month, media reports said
By Staff writer
Sun 21 Aug 2011 01:25 PM

Arab investors are unlikely to be among those clamouring for
a slice of Manchester United’s $1bn listing in Singapore, former Portsmouth
owner Sulaiman Al Fahim has said.

England’s most successful club, which has previously been
linked to wealth fund Qatar Holdings, is expected to file an initial public
offering in the fourth quarter of this year.

But UAE businessman Al Fahim said the investment’s inherent
risk was likely to deter wealthy Arab investors, despite the region’s strong links
with Premier League clubs.  

“Arab
investors will look at deals where there can be a great upside,” he told
Arabian Business. Man United is already huge in terms of commercial income; there
is limited gain but considerable risk.

“Football IPOs are very high risk. One penalty, one injury can totally change
your match, your income and of course your share price.”

United is expected to start drumming up investor interest in the listing next
month, media reports have said. The Financial Times reported that Peter Lim,
the Singaporean billionaire who tried to buy Liverpool Football Club last year,
has been approached to act as a cornerstone investor.

United has been examining ways to cut its financing costs
and raise money that could be used to expand its business. It also wants to
acquire players that can help it fend off the challenge of clubs including
Manchester City, owned by Sheikh Mansour bin Zayed Al Nahyan, a member of Abu
Dhabi’s ruling family, and Chelsea, owned by Russian billionaire Roman Abramovich.

The club’s US owners, the Glazer family, bought the team in
2005 for £790m ($1.3bn). United spends about £45m a year to service a £500m bond.
The bond, which matures in 2017, replaced bank debt required for the purchase.

United's gross debt stood at £478m ($787m) at the end of
March. The club made a net loss of £84m in 2010.

As much as 30 percent of the club will be sold in the IPO,
which would give the club an enterprise value, or the sum of its stock and debt
minus cash, of about $3.8bn, sources told Bloomberg News.

Forbes magazine estimates the team is now worth $1.8bn,
while it was third behind Real Madrid and Barcelona in Deloitte’s list of the
richest soccer clubs by revenue, published in February.

Club CEO David Gill told Arabian Business earlier this year that
Manchester United’s brand was worth close to $2bn.

United picked Asia as the listing venue as more than half of
its fans are based in the region. The club, which says it’s the most-supported
team in the world, has a global following of more than 330 million, according
to a club-sponsored survey. It has fan clubs in Asian nations including
Thailand and Singapore with about 190 million followers.

*With agencies

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