This blog is a continuation to my previous blogs -but even if you haven't read them this will make sense to you.
So Manchester United are going public and lets do the Math:
All the figures here are as reported by ManUtd to the U.S. Securities and Exchange Commission. Link here.
The details about the IPO are here.
So Manchester United have decided to sell 8,333,334 Class A ordinary shares. (Use of Proceeds)
They are expecting to sell each share at $18
So that would give us : $18 x 8,333,334 = $150,000,012 let's take an approx figure of $150M.
It clearly says in the filing - "the net proceeds from the sale would be approximately $140M... after deducting estimated underwriting discounts and commissions. Expenses of this offering will be paid by us with existing cash on hand."
So :
$150M - underwriting discounts - commissions = 140M.
It goes on to say " We intend to use all of our net proceeds from this offering to reduce our indebtedness by exercising our option to redeem and retire $116.8 million (£73.0 million) in aggregate principal amount of our 83/8% US dollar senior secured notes due 2017 at a redemption price equal to 108.375% of the principal amount of such notes and £8.3 million in aggregate principal amount of our 83/4% pound sterling senior secured notes due 2017 at a redemption price equal to 108.750% of the principal amount of such notes, plus, in each case, accrued and unpaid interest to the date of such redemption. In addition, upon consummation of this offering, our senior secured notes previously purchased by us in open market transactions will be contributed to MU Finance plc and retired."
So, all of it goes to repay existing debt and nothing into the Glazers' pockets(See underlined text).
Another statement : " We will not receive any proceeds from the sale of any Class A ordinary shares by the selling shareholder."
So assuming the price of the share goes down to $17,
then : $17 x 8,333,334 = $141, 666, 661
or $15 x 8,333,334 = $125,000,010
or $19 x 8333,334 = $158,333,346
Which is explained in detail in my previous blog(Link here).
Which is why in the document it says : " A $1.00 increase in the assumed initial public offering price of $18.00 per share, which is the midpoint of the range set forth on the cover page of this prospectus, would increase our expected net proceeds from this offering by $7.8 million, and correspondingly would increase the amount of our pound sterling senior secured notes that we will redeem and retire in connection with this offering by £4.5 million. A $1.00 decrease in the assumed initial public offering price would reduce our expected net proceeds by $7.8 million, and correspondingly reduce the amount of our pound sterling senior secured notes redeemed and retired in connection with this offering by approximately £4.5 million (if the initial public offering price is $17.00 per share). A $2.00 decrease in the assumed initial public offering price would reduce our expected net proceeds by $15.6 million, and correspondingly reduce the amount of our pound sterling senior secured notes and US dollar senior secured notes redeemed and retired in connection with this offering by approximately £8.3 million and $1.0 million, respectively (if the initial public offering price is $16.00 per share). A $3.00 decrease in the assumed initial public offering price would reduce our expected net proceeds by $23.4 million, and correspondingly reduce the amount of our pound sterling senior secured notes and our US dollar senior secured notes redeemed and retired in connection with this offering by approximately £8.3 million and $8.2 million respectively (if the initial public offering price is $15.00 per share)."
About dividends : "We do not currently intend to pay cash dividends on our Class A ordinary shares in the foreseeable future. However, if we do pay a cash dividend on our Class A ordinary shares in the future, we will pay such dividend out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands law. Our board of directors has complete discretion regarding the declaration and payment of dividends, and our principal shareholder will be able to influence our dividend policy..... Any dividends we declare on our ordinary shares will be in respect of both our Class A ordinary shares and Class B ordinary shares, and will be distributed such that a holder of one of our Class B ordinary shares will receive the same amount of the dividends that are received by a holder of one of our Class A ordinary shares. We will not declare any dividend with respect to the Class A ordinary shares without declaring a dividend on the Class B ordinary shares, and vice versa."
How bout that?
So I have to go back to my previous point.
Please let the IPO be a success.
Please share if you agree.
My previous blogs on the same topic:
1) Why the LUHG brigade needs to shut up for a while!
2) Who's the real loser? (Glazers V/s ManUtd)
Find me on Twitter. https://twitter.com/agnel
So Manchester United are going public and lets do the Math:
All the figures here are as reported by ManUtd to the U.S. Securities and Exchange Commission. Link here.
The details about the IPO are here.
So Manchester United have decided to sell 8,333,334 Class A ordinary shares. (Use of Proceeds)
They are expecting to sell each share at $18
So that would give us : $18 x 8,333,334 = $150,000,012 let's take an approx figure of $150M.
It clearly says in the filing - "the net proceeds from the sale would be approximately $140M... after deducting estimated underwriting discounts and commissions. Expenses of this offering will be paid by us with existing cash on hand."
So :
$150M - underwriting discounts - commissions = 140M.
It goes on to say " We intend to use all of our net proceeds from this offering to reduce our indebtedness by exercising our option to redeem and retire $116.8 million (£73.0 million) in aggregate principal amount of our 83/8% US dollar senior secured notes due 2017 at a redemption price equal to 108.375% of the principal amount of such notes and £8.3 million in aggregate principal amount of our 83/4% pound sterling senior secured notes due 2017 at a redemption price equal to 108.750% of the principal amount of such notes, plus, in each case, accrued and unpaid interest to the date of such redemption. In addition, upon consummation of this offering, our senior secured notes previously purchased by us in open market transactions will be contributed to MU Finance plc and retired."
So, all of it goes to repay existing debt and nothing into the Glazers' pockets(See underlined text).
Another statement : " We will not receive any proceeds from the sale of any Class A ordinary shares by the selling shareholder."
So assuming the price of the share goes down to $17,
then : $17 x 8,333,334 = $141, 666, 661
or $15 x 8,333,334 = $125,000,010
or $19 x 8333,334 = $158,333,346
Which is explained in detail in my previous blog(Link here).
Which is why in the document it says : " A $1.00 increase in the assumed initial public offering price of $18.00 per share, which is the midpoint of the range set forth on the cover page of this prospectus, would increase our expected net proceeds from this offering by $7.8 million, and correspondingly would increase the amount of our pound sterling senior secured notes that we will redeem and retire in connection with this offering by £4.5 million. A $1.00 decrease in the assumed initial public offering price would reduce our expected net proceeds by $7.8 million, and correspondingly reduce the amount of our pound sterling senior secured notes redeemed and retired in connection with this offering by approximately £4.5 million (if the initial public offering price is $17.00 per share). A $2.00 decrease in the assumed initial public offering price would reduce our expected net proceeds by $15.6 million, and correspondingly reduce the amount of our pound sterling senior secured notes and US dollar senior secured notes redeemed and retired in connection with this offering by approximately £8.3 million and $1.0 million, respectively (if the initial public offering price is $16.00 per share). A $3.00 decrease in the assumed initial public offering price would reduce our expected net proceeds by $23.4 million, and correspondingly reduce the amount of our pound sterling senior secured notes and our US dollar senior secured notes redeemed and retired in connection with this offering by approximately £8.3 million and $8.2 million respectively (if the initial public offering price is $15.00 per share)."
About dividends : "We do not currently intend to pay cash dividends on our Class A ordinary shares in the foreseeable future. However, if we do pay a cash dividend on our Class A ordinary shares in the future, we will pay such dividend out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands law. Our board of directors has complete discretion regarding the declaration and payment of dividends, and our principal shareholder will be able to influence our dividend policy..... Any dividends we declare on our ordinary shares will be in respect of both our Class A ordinary shares and Class B ordinary shares, and will be distributed such that a holder of one of our Class B ordinary shares will receive the same amount of the dividends that are received by a holder of one of our Class A ordinary shares. We will not declare any dividend with respect to the Class A ordinary shares without declaring a dividend on the Class B ordinary shares, and vice versa."
How bout that?
So I have to go back to my previous point.
Please let the IPO be a success.
Please share if you agree.
My previous blogs on the same topic:
1) Why the LUHG brigade needs to shut up for a while!
2) Who's the real loser? (Glazers V/s ManUtd)
Find me on Twitter. https://twitter.com/agnel
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