Market jitters explain Manchester United's New York flotation delay


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The Independent Football

Manchester United appear to be planning an imminent launch of the marketing roadshow for their proposed $300m (£193m) New York flotation, despite the apparent postponement of the move designed to reduce the club's crippling debts.

Sources suggested yesterday that the roadshow, a vital component of the drive to make the United States initial public offering (IPO) successful, may begin today or possibly early next week and that the offering may be priced in three weeks.

But the situation is fluid and jitters in the market showed no sign of receding yesterday, providing more evidence for why the float is understood to have been delayed. The S&P 500 index fell for a fourth day on Wednesday, amid worries about the European debt crisis and earnings,

The Glazer family announced earlier this month that they were planning to list United on the New York Stock Exchange, in what was a significant admission that the club's £423m debt is hampering their ability to compete against the best sides in Europe – and to cope with the wealth of owners such as Sheikh Mansour bin Zayed al-Nahyan at Manchester City. But United's owners have been forced to reassess the New York float, having already abandon ideas to list the company's shares via an IPO in Singapore.

United could not offer The Independent any comment on the situation last night, owing to US regulatory restrictions.

There have been conflicting reports of when United's shares might begin trading. Some sources had thought it was to have been early next week, though Reuters yesterday quoted a source suggesting it was to have been this week, before the delay. If United do list in the week commencing 13 August, they will face the traditionally quiet period of the US public holidays, before Wall Street tends to return to normality in early September.

Morgan Stanley, which was one of the underwriters for the offering planned in Singapore, dropped out of the syndicate for the US IPO as a result of concerns that the valuation the team was seeking was not realistic, sources have said. Now, Jefferies Group is leading the syndicate, which also includes Credit Suisse, JP Morgan Chase, Bank of America Merrill Lynch and Deutsche Bank.

The IPO would bring in two classes of shares, leaving the Glazers in control and requiring a new Manchester United company to be based in the Cayman Islands. The Manchester United Supporters' Trust (Must) has pointed to the dual class share structure as the reason for the apparent postponement and called on the Glazers "to come back with a full flotation of Manchester United with a single class of full voting shares." Must's chief executive, Duncan Drasdo, said: "Should they choose to do this, with no strings attached, we would support such a flotation wholeheartedly and encourage the global fan base of Manchester United to seize such a historic opportunity to secure a meaningful fan ownership stake."