Manchester United - New York Stock Exchange (IPO)
According to Initial Public Offering (IPO) plan Manchester United shares will be listed on New York Stock Exchange (Wall Street) on Monday.
Manchester United F.C. is offering 8,333,334 Class A Ordinary Shares and the selling shareholder is offering 8,333,333 class A Ordinary Shares. Manchester United F.C. shares will trade under the symbol “MANU”.
Is being estimated that the owner’s of Manchester United will only use half of the club’s flotation on the stock market to reduce its debts. Glazer's family and the club will be selling half the IPO shares in offering that could raise as much as $ 333 millions.
On the other had - there are voices against Manchester United IPO in US Securities Market. According to Manchester United Supporters Trust (MUST) “ Supporters will be very angry about Manchester United. The Glazers have already cost United more than 550 million pounds in debt related fees and now another slap in the face as they help, themselves to half of the proposed IPO proceeds”.
Obviously, there are benefits but also threats in case of an IPO and especially when then listed shares belong to the most valuable sport club on earth.
In general the benefits and disadvantages for a company going public can be reported as .
Benefits of an IPO
1. Access to capital markets to fund growth
2. Creation of liquidity and potential exit for the current owners
3. Maximun value of the company
4. Enhancement of the company’s public profile
5. Improvement in debt finance terms
6. Extra assurances for partners, suppliers and clients
7. Enhanced loyalty of key personnel
8. Superior efficiency of the business
Disadvantages of an IPO
1. Dilution of Control. The control of the current shareholders ownership will be restricted and will be diluted in a public offering.
2. Control of the company may shift and the company may face an unfriendly take over.
3. Earnings per share will be diluted
4. Disclosure of information - Company will become subject to periodic reporting and certain other requirements of the Securities Exchange Act of 1934.
5. Underwriters expenses discounts and commissions, offering expenses, including legal and accounting fees, printing cost etc.
Also, there is another kind of risk, limited in case of Manchester United but is a possible event. If the offering is not consummated, the company may have to expense outlays incurred prior to termination of the offering.
Finally, an IPO is very attractive financial strategy for a fast growing company.
Apart from reactions or IPO support voices. Manchester United is our favorite and loved club we will always love and support it.
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