August 9, 2012 / 10:48 PM / in 5 years

Manchester United IPO values club at $2.3 billion, less than expected

Members of the Manchester United Ltd. road show marketing team exit following their meetings with bankers in New York, August 6, 2012. Manchester United Ltd's owners stand to make about three times their investment in the British soccer club if it successfully goes public. REUTERS/Brendan McDermid

(Reuters) - Manchester United Ltd said its shares priced on Thursday at $14 apiece for its U.S. initial public offering, valuing the British soccer club at $2.3 billion, significantly below expectations.

The team priced 16.7 million shares, as planned, and raised $233.2 million, about $100 million less than it had hoped.

While that still makes it the largest sports-team IPO on record, the value is much below the up to $3.3 billion the club and its owners, the Glazer family, were expecting.

That would mean the club, which has been trying to reduce its debt after its 2005 leveraged buyout by the Glazer family, would get less money to do so. The Glazers, whose holdings include shopping centers and the Tampa Bay Buccaneers football team, will also take in less money from the share sale.

The company expected to price shares in a range of $16 to $20. The deal would have raised $333 million if it had priced at the high end of its range. The Glazers are selling half the shares, while the team is selling the rest.

Manchester United, which claims to be the most popular soccer team in the world with more than 650 million fans, has said it wanted to use the proceeds to pay down its significant debt load, which stood in excess of 437 million pounds ($682 million) as of June 30.

Some fans of the team have protested the IPO, criticizing the Glazers for only using half of the deal’s proceeds to pay down debt. They argue that this hefty debt load has led to reduced financial flexibility, at the expense of investment in players and the team’s performance.

Reporting by Olivia Oran; Editing by Gary Hill and Steve Orlofsky

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