I tweeted about this last night, but it looks like the Glazers have radically changed the clubs IPO.
The original plan was for United to raise £500 million from an IPO and that all the proceeds would be used to pay of the clubs debt.
But after it became clear that the Glazers could not raise that much money in an IPO, they came back with plan B. A smalller IPO (£200 million) in which the Glazers receive half the IPO proceeds for themselves, with only a small amount of money (£75 million) to on used to pay down United’s debt.
The debt repayment is miniscule, as it will save the club only £6.5m per year in interest payment , or £4.2m after tax.
And if that wasn’t bad enough, remember all those pro-Glazer statement by Fergie and David Gill? Well it seems that as part of the IPO, United are to issue 16m shares (about $288 million) to Manchester United Senior Management under a “2012 Equity Incentive Award Plan”. The prospectus does not say who gets those shares, but it would be shocking if Fergie and Gill did not. Fergie has been pretty outspoken that United fans need to layoff the Glazers. He now needs to step forward about whether he received shares as part of the 2012 Equity Incentive Award Plan.
As you can imagine United fans are up in arms over the latest financial maneuvering by the Glazers. Duncan Drasdo, chief executive of the Manchester United Supporters Trust had this to say:
“The Glazers have already cost United more than £550m in debt related fees and now another slap in the face as they help themselves to half of the proposed IPO proceeds. Each of the 6 lineal descendants of Malcolm Glazer will claw out $25 million for themselves. Clearly this has nothing to do with benefits for Manchester United and is all about giving the Glazers quick access to desperately needed cash at the expense of our football club. What is the sudden reason for this desperation for cash now? There is now no doubt that this IPO is bad for Manchester United supporters, Manchester United Football Club and any investors gullible enough to pay the inflated price they’ve attached to inferior shares which have just 1/10 of the voting rights of the Glazers shares and no dividends. Their bare faced cheek is almost unbelievable.”
Where is the Premier League in all this? They never said a word when the Glazers heaped their takeover debt on the club (they were silent when Hicks and Gillett did the same at Liverpool). And they are silent now that the club is doing an IPO where over half the proceeds is going to the owners, leaving the club still with over $350 million in debt. What happened to their “fit and proper person” rule?