Manchester United has been forced to cut the value of its imminent share flotation in New York.
The football club said it would sell shares at $14 each, below the $16-$20 range that it announced just weeks ago.
It is selling shares representing 10% of the club, which will raise $233m to pay off some debt, below the $333m hoped for.
The lowering of the debut share price suggests that it could not find buyers at those higher prices.
A statement from the Manchester United Supporters Trust (MUST) criticised the money-raising plan: 'We have made it clear that on the Glazers' terms, the share sale is a bad deal for fans, investors and the club.
'For the club, this is a bad deal because more than half of the funds raised will now be paid direct to the Glazer family, with a smaller portion being used to pay down some of their debt which they have saddled the club with since 2005'.
Bloomberg reports that the IPO gives the Glazer family’s team an enterprise value of $2.9bn, about $1bn more than the value of Spain’s Real Madrid, according to data compiled by Bloomberg and Forbes. Increasing competition from other teams for fans and corporate sponsorship and an expensive debt load may weigh on earnings, said Morningstar’s Kenneth Perkins, who values the stock at $10 a share.
The company 'was asking investors to pay a pretty high price and take on a lot of risk', said Perkins, a Chicago-based analyst who covers consumer companies. 'It could work out, but the risk is to the downside'.
The Glazers will maintain almost 99% of the voting control, according to the original terms of the prospectus, because the Class B shares they own carry 10 votes apiece, compared to 1 vote each for the Class A shares being sold in the IPO. The Glazers sold half of the shares offered, while the company sold the rest.
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image: © Paolo Camera