United shares to trade at discount

PA Sport

Manchester United shares will start trading in New York on Friday at a big discount on the club's earlier expectations over its worth.

United's advisers will offer a 10% stake at a price of 14 US dollars (£9), valuing it at around £1.5billion, but much lower than the range of 16 to 20 US dollars (£10-12) it had hoped to achieve, worth up to £2.1billion.

The club, bought by the Glazer family in 2005 for about £800million, will raise about 233 million US dollars (£149million) and this will be partly used to pay off some of its debt.

The lower flotation price comes after the Glazer family, which also owns the Tampa Bay Buccaneers NFL gridiron team, previously failed to garner sufficient support to sell shares on exchanges in Hong Kong and Singapore.

However, United, which claims to have a global fanbase of about 660million and has won a record 19 league titles, is still one of the world's most valuable sports teams. Its shares will begin trading under the stock market ticker Manu.

Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said the lowering of the flotation price was "disappointing but not unexpected".

He added: "As was the case with the UK experience, football clubs are notoriously difficult investments, ultimately tied to the fortunes of the club on the pitch. However, interest in the sport is taking off in the US and last night's Olympics victory for the women's football team is likely to fuel interest further."

It had been expected that the Glazers would make about £90million from the deal, with the remaining proceeds raised in the initial public offering (IPO) used to pay down some of the 134-year-old club's debt, which was last reported to be around £423 million.

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