The world's most popular sports team is getting ready to list its stock on the world's largest exchange.
British soccer club Manchester United is expected to set a price for its initial public offering Thursday night and start trading on the New York Stock Exchange on Friday as it tries to pay off more of the heavy debt piled on the club in its 2005 takeover.
The 134-year-old club, with a record 19 English championships, is one of the most well-known teams on the planet, so the IPO is highly anticipated. But some analysts say the debt-ridden team is overvalued and the offering is dependent on investors wearing their fan colors rather than their financial thinking caps.
"It's really trading on the level of fan interest as opposed to any sort of financial interest," said Sam Hamadeh, CEO of PrivCo LLC, which researches privately held companies.
"A winning team does not make a winning investment." Half the 16.7 million shares are being sold by the team, and half by the team's owner, a company controlled by the Glazer family. The team expects to get $141 million out of the deal, which it will use to pay down debt. Less than 2 percent of the team's shares are being sold.
The family's 2005 leveraged takeover was valued at $1.47 billion, much of it borrowed. United carried 416.7 million pounds ($666.2 million) in debt as of March 31. It had no debt when it was bought by the Glazer family in 2005.
The Glazers are a U.S. family who also own the Tampa Bay Buccaneers American football team. Malcolm Glazer is CEO of First Allied Corp., a holding company with many business interests. His two sons Avram and Joel are co-chairmen of Manchester United.
After the stock offering, the Glazers will keep control of the team through Class B shares with 10 times the voting power of the stock that would be sold to the public.
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