MANCHESTER United shares started trading in New York yesterday at a big discount on the club’s earlier expectations over its worth.
United’s advisers offered a 10% stake at a price of 14 US dollars (£9) per share, valuing it at around £1.5bn but much lower than the range of £10-£12 it had hoped to achieve, worth up to £2.1bn.
The club, bought by the Glazer family in 2005 for about £800m, will raise about £149m and this will be partly used to pay off some of its debt.
The lower flotation price comes after the Glazer family previously failed to garner sufficient support to sell shares on exchanges in Hong Kong and Singapore.
However, United, which claims to have a global fan base of about 660 million and has won a record 19 league titles, is still one of the world’s most valuable sports teams.
Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said the lowering of the flotation price was disappointing but not unexpected.
He added: “As was the case with the UK experience, football clubs are notoriously difficult investments, ultimately tied to the fortunes of the club on the pitch. However, interest in the sport is taking off in the US and the Olympics victory for the women’s football team is likely to fuel interest further.”
It had been expected that the Glazers would make about £90m from the deal, with the remaining proceeds raised in the initial public offering (IPO) used to pay down some of the 134-year-old club’s debt, which was last reported to be around £423m.
Although the listing has been planned for some time, the Glazer family originally claimed all the proceeds would go towards United’s debt, angering fans.
Earlier this month, a leading Manchester United fans’ group called for a boycott of the club’s expanding portfolio of sponsors in protest at the planned flotation, saying: “The Manchester United Supporters Trust has called for a worldwide boycott of Manchester United sponsors’ products.
“The boycott strategy is intended to send a loud and clear message to the Glazer family and club sponsors that, without the support and purchasing power of the fans, the global strength of the Manchester United brand doesn’t actually exist.”