Manchester United has made a big push in recent years to expand their commercial interests in Asia, and a significant proportion of their €367 million turnover is derived from this part of the world.
No surprise, given 60% of their supporters (myself included) live in Asia and also their decision to test local investor base appetite with an IPO on the Singapore stock exchange.
The IPO has been heralded as a coup for Singapore, a high profile listing for one of football’s greatest brands and one that the exchange has sought to heavily publicise, particularly the fact that Manchester United chose to list in Singapore rather than Hong Kong.
Many reasons have been muted for the Glazers’ choice to list in Singapore; their South East Asia fan base, a broader geographical investor base and that the Singapore stock exchange reduced the amount of time the listing would take.
All may be true, but the key reason for choosing Singapore over Hong Kong must surely be their allowance of a two-tier structure for the equity offering; allowing the listing of shares with differing voting rights.
The Hong Kong stock exchange (similar to the LSE) does not allow this type of listing, and the bottom line is that it allows the Glazers to keep approx 90% of the voting rights, whilst offering 25% of the share capital for the club – a hefty and timely windfall to address their reliance on debt finance, given upcoming premier league financial fair play rules.
As a supporter, I am not happy that my club is run by the Glazers, that they have saddled it with debt and that through this listing they maintain near 90% of the voting rights on the board. However, I do welcome this listing as an opportunity for them to reduce Manchester United’s debt burden, and hope they use the cash with the club’s best interests at heart.
This listing may be the first of many. With F1 deciding on Singapore as a venue for their own Asian IPO, the derby score could soon be Singapore 2 – Hong Kong 0, and surely they will not be the last sporting brands looking to raise capital in Asia.
The motives for F1 choosing Singapore over Hong Kong are less clear, however should the score-line increase to 3 – 0, 4 – 0 or even a 5 goal drubbing, surely the Hong Kong regulators will stand up and take notice – it will be interesting to see how they react.
In any event, Credit Suisse and Goldman Sachs (the lead banks on these deals) are both likely to be happy with the current score-line. No doubt, should these IPOs go well, there are likely to be no shortage of clients looking to follow suit or investment banks looking to prove their goal scoring prowess.