United's tantalising match in Singapore looks like a sell-out

Focus: Manchester United have announced seven new international signings ahead of the looming transfer deadline. And there's not an Englishman among them.
Manchester United was listed on the London Stock Exchange from 1991 until 2005, when the Glazer family bought it out and delisted it. Alex Livesey / Getty Images
Manchester United was listed on the London Stock Exchange from 1991 until 2005, when the Glazer family bought it out and delisted it. Alex Livesey / Getty Images

Manchester United have announced seven new international signings ahead of the looming transfer deadline imposed by the football authorities.

Seven? Did you miss them? Here they are in full: Credit Suisse of Switzerland; Morgan Stanley and JPMorgan Chase of the US; BOC International of China; CIMB of Malaysia; Singapore's DBS; and Credit Agricole of France.

That's quite a starting line-up for the "big match" United is expected to kick off some time next month, although the final whistle won't be blown until many weeks later, when (or rather if) the club's owners can pull off a successful initial public offering (IPO) on the Singapore stock market.

All the above names, stars of the global investment banking industry, have been signed up as advisers, co-ordinators or marketeers for the IPO, which could be worth US$1 billion (Dh3.67bn) and value the Old Trafford club at $3bn.

But did you spot the obvious exclusion from the list? Like some clubs in the English Premier League (EPL) these days, there isn't an Englishman in the side. No Barclays Capital, Cazenove, or Rothschild has made the first team (or even the subs' bench). And that tells you something significant about the proposed deal: it probably couldn't take place in the UK at all.

Manchester United was listed on the London Stock Exchange from 1991 until 2005, when the current owners, the Glazer family from the US, bought it out and delisted it in a highly leveraged transaction that valued it at $800 million.

That takeover has proved to be so controversial and unpopular with vociferous fans in England that it is unlikely the Glazers would want to submit to the scrutiny of another London listing. So they decided to look east for a more convenient stock market, and after checking out Hong Kong, opted for Singapore.

Some commentators have suggested that Singapore would be so grateful to United for choosing it as the venue for its market comeback that the regulators there would give it an easy ride in terms of transparency and disclosure.

United do have a nasty reputation for intimidating referees at home and away, but it is doubtful the Monetary Authority of Singapore (MAS), the market watchdog, will be as easily scared as the men in black from the EPL. United's financials will be given a pretty thorough going over by the men from MAS.

What they will see is a business operation struggling with a debt problem. At the most recent full financial disclosure, the figures for the year ended June last year, the club's parent company announced a loss of £109m (Dh661.9m), much of it because of repayments of loans totalling £590m.

The situation has probably improved since then, as the Glazers managed to offload a big chunk of this debt in a mysterious deal towards the end of last year. No doubt MAS will seek details of this so-far-unexplained transaction, and whether it affects the ultimate ownership structure. The Glazers insist they are still 100 per cent owners.

But they will not be after the IPO. The plan is to sell 25 to 30 per cent for about $1bn, making United far and away the most valuable football club in the world, worth more than twice as much as Real Madrid, as estimated by Forbes magazine.

That valuation is not official, but already it is scaring some in Singapore. Peter Lim, the billionaire who tried to buy Liverpool last year, has reportedly told associates it is "rich", although he is still believed to be considering acting as a "cornerstone" investor in the IPO. Temasek, the Singapore investment company owned by the government, has also been mentioned as a possible investor.

But neither of them, nor the Singapore exchange, will want the embarrassment of an overpriced IPO that fails to perform in the aftermarket.

That leaves the Glazers with a dilemma: they want to maximise their share value, but do not want a share register full of Asian malcontents who could stir up further trouble for them. They have plenty of that back already in the UK, among creditors and fans.

The $3bn tag could just be a sighting shot, but in any case it looks as though it will have to come down. Exactly where the optimal level falls is a test for the skills of the blue-blood advisers United have signed up.

Plenty of people in the Gulf region are interested in the potential valuations of football clubs. This "match" will be watched with great interest throughout the region.

Published: August 24, 2011 04:00 AM

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