Manchester United has “temporarily” paused plans to launch its $300m initial public offering in the US. While the Glazers press machine blames market volatility but the real reason is weak investor demand at the valuation/share structure demanded by the Glazers.
Its a huge slap in the face for the Glazers who have previously failed with IPO’s in Hong Kong and in Singapore after demand for its shares fell short. It had looked to raise as much as $1bn as part of its aborted Singapore float.
The New York IPO was not as large, expected to be around £300m which would have been used to pay down the clubs net debt of £425m.
So what does the Glazers do now, and how does it effect United’s summer transfer plans. United have been linked with a £30m bid for Lucas and are said to have offered Arsenal £15m for Robin van Persie. With the expected influx of cash from the IPO now gone, will SAF have to sell players (Nani and Berbatov) before he can buy?
And long-term what does this mean to the Glazers. Singapore, Hong Kong and New York have all said no thanks to their IPO. That only leaves London as a possible financial market, but the problem there is that the Glazers will get a much lower valuation than they would in the other markets.
The other option is for the Glazers to see a part of the team to another party. The sticky point there, much like the failed IPO’s, has always been the Glazers valuation of the club.
Without the IPO we are back to United have to spend over £45m in interest payments each year. Money that is not being invested in the team.