Man United Jumps as Man City Stake Sale Puts Focus on Value
Man United Jumps as Man City Stake Sale Turns Focus on Valuation
(Bloomberg) -- Manchester United Plc shares had their biggest intraday jump ever, rising as much as 14% in New York, after the purchase of a stake in the soccer club’s local rival Manchester City by U.S. private equity firm Silver Lake turned a spotlight on valuations.
Silver Lake’s acquisition of a 10% holding in last season’s English champion implied a valuation for the club of about $4.8 billion. Applying the same model to neighbors United would make the 13-time Premier League winner worth about $5.3 billion excluding debt, according to Gabelli & Co.’s John Tinker. The analyst last month touted the possibility of the Glazer family, who own about 75% of the business, seeking a sale of its stake.
The jump in United’s stock was the most since the company went public in 2012, giving it a market capitalization of just over $3 billion.
“Any bid by a company wanting immediate exposure in Asia should generate a significant premium if the controlling Glazer family ever decided to sell,” Tinker said in a note Wednesday, adding that the endorsement of Manchester City by Silver Lake is particularly strong as they are not seen as “trophy hunters,” but rational investors.
“The Manchester City investment is an endorsement from one of the smartest investors in America,” Tinker said by phone. “But Manchester United has more pedigree, a longer history, a larger fan-base and is the best known team in Asia.”
On the field of play, United currently ranks below City, languishing in ninth spot in the Premier League standings, six places behind its neighbor. The teams are due to play each other on Dec. 7.
United shares were up 13% to $18.84 a share at 10:20 a.m. New York time, headed for their highest close since mid-May.
--With assistance from David Hellier.
To contact the reporters on this story: Joe Easton in London at jeaston7@bloomberg.net;Sam Unsted in London at sunsted@bloomberg.net
To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Paul Jarvis
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