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Man United IPO to tap huge Asia fan base

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SINGAPORE, August 17 – Legendary English football club Manchester United plan to tap their massive Asian fan base with a lucrative share listing in Singapore this year, sources familiar with the deal confirmed Wednesday.

Media reports said the Red Devils, the Premiership title-holders and three-time champions of Europe, aim to generate $1 billion with an initial public offering (IPO) of 30 percent of the club’s shares.

“The deal is on. It is in Singapore,” a person familiar with the plan told AFP on condition of anonymity, adding that the share offer was expected to take place in the fourth quarter.

Asia was chosen over London because it accounts for 190 million out of the estimated 330 million United followers worldwide, and most of the club’s sponsors are based in Asia or generate a large part of revenue from the region.

“Asia has been integral to the club from a fan point of view and also from a commercial point of view,” the source said.

United were ranked by business magazine Forbes earlier this year as the world’s most valuable football club with a value of $1.86 billion.

The Straits Times newspaper said representatives of the club met with Singapore Exchange (SGX) officials recently.

US tycoon Malcolm Glazer and his family, who bought the club in 2005, have sent representatives to meet bankers in the city-state, it said.

Singapore’s state investment agency Temasek Holdings is being eyed as a cornerstone investor, the newspaper added.

An SGX spokesperson told AFP it was the exchange’s policy not to comment on press reports.

Sources told Dow Jones Newswires that Credit Suisse Group had been mandated as sole global coordinator and bookrunner on the deal.

Media estimates of $1 billion for 30 percent of the club’s shares means a total valuation for the company of more than $3 billion, far higher than other estimates such as that given by Forbes.

Singapore’s Business Times noted that the timing of United’s IPO would come ahead of new regulations making it mandatory for European clubs to break even from the start of the 2013/2014 season.

If not, they risk being expelled from European club competitions.

The club, which was once listed on the London Stock Exchange as Manchester United PLC, had reportedly first planned to list in Hong Kong.

United were delisted in 2005 after the Glazers bought the club through a deal that was heavily reliant on debt financing.

The family’s ownership has been deeply unpopular with United fans.

The Business Times said the business is currently 717 million pounds ($1.18 billion) in the red.

Song Seng Wun, an economist with financial group CIMB in Singapore, said he was not surprised that United would choose to list in Asia.

“More than half of their fan base is in Asia — from China to Korea and all the way to Southeast Asia,” he told AFP, adding that even fans too young to have a trading account may ask their parents to buy shares.

English football counts wealthy Asians among its most ardent fans.

Singaporean billionaire Peter Lim, a self-confessed United fan, last year lost a bid to buy Liverpool for 320 million pounds.

Lim could not be immediately reached for comment on Wednesday, but online reactions to the planned IPO suggested that financially savvy fans could be deterred by United being in debt.

The source who spoke to AFP on the IPO plans sought to dismiss the widely held perception that United was bleeding money.

“It is debt-ridden but it’s not loss-making. On an operational level, it is profitable. It is one of the three most profitable clubs in the world.”

A Singapore listing by United would boost the city-state’s credentials as a financial centre.

The China port unit of Hong Kong conglomerate Hutchison Whampoa — Hutchison Port Holdings Trust — raised $5.5 billion in Singapore earlier this year.

But perennial rival Hong Kong has also had its own recent coups with successful IPOs by Italian luxury goods house Prada and Samsonite, the world’s biggest luggage maker.

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