American billionaire George Soros buys stake in Manchester United
Tuesday 21 August 2012
Crashing out of Europe can mean very different things to different people. Manchester United's early exit last year from the Champions League spelled a big hit to revenue and pride. George Soros, in contrast, made his name, and perhaps a billion pounds, when his Quantum fund bet that Britain would have to leave the European Exchange-Rate Mechanism in 1992. The octogenarian financier has now turned his attention to the Premier League giants. That could help lift investor sentiment about the recently floated Red Devils.
A Securities and Exchange Commission filing shows Soros' fund bought more than 3.1million Manchester United shares on August 9, the day of the listing. That £28m outlay bought 7.85 per cent of the club's publicly traded Class A shares. That equates to 1.9 per cent of the entire club.
Of course, history is littered with rich men making trophy investments in sports. To Soros, whom Forbes reckons is worth about £12.6 billion, this stake is peanuts. And the Hungarian born American can do what he wishes after cashing out the outside investors in his funds last year. But he seems too canny an investor to put his money in a loss-making plaything.
More likely his fund, which Thomson Reuters data shows has disclosed stakes in Wal-Mart, PepsiCo, General Electric, and more than 160 other companies, saw an opportunity to build a significant stake in an unusual business. Few sports clubs could claim to match Manchester United's global standing and Midas touch with commercial partners. And none of those are listed.
Of course the stock's drawbacks are still clear: the Glazer family retains near-total voting and board control; the club must take on rivals backed by Russian oligarchs and oil money; and the valuation is not obviously cheap. Moreover, plumping for a US listing as an "emerging growth company", far away from the fan base, still looks cynical.
Nonetheless, it always helps to have one of the world's most successful investors in your corner. For a stock that debuted at $14 a share, against a $16 to $20 target, and has since drifted closer to $13, Soros is a supporter worth having.
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