What do you suspect the true reason is Dave ? In regards to the voting rights as United are only selling 25% of shares the voting rights wouldn't really make much difference anyway due to the Glazers still being the majority shareholder. They will still be protected in the same way other minority shareholders are whether or not they have voting rights. I think, as you stated, the reason it was pulled inthe global economy is going to get alot worse before it gets better and at the minute there is too much risk in the market, the potential share price would be low and therefore United couldn't maximise the potential income for the share issue so have rightly delayed it. What's your take on it all ?
Let's start by saying that I wasn't having a 'pop'. The Glazers postion isn't known to me but with the current global situation I would suggest that all top line investors would be critically appraising all of their holdings and hence exposures. The problem, as I see it, is that United's future is in the hands of a family who's own future will be the decideing factor. When it comes to the share issue, the problem that I see for major investors is the size of the floatation (covering the majority of the debt) to the overall value of the company. Then we see a position of a 25% non-voting shareholding funding 30+% of the company. Now we can have a long debate about ethics but in the end we know that major investors are not going to accept that position. When it comes to the global economy I am increasingly pessimistic. Weare still talking about double-dip recessions and failing to see that we are in a totally different beast - a depression. Just because we have yet to experience a 1927 style equity collapse does not mean that we are not in depression - remeber this whole thing started in the US in 2007 and hit Europe in 2008. Things have not improved since then and the politicians, IMF, World Bank, etc are not displaying any form of agreement upon a staregy to get us out of it!
I didn't think you was having a pop Dave. Ethically I don't see a problem as the investor knows what they are buying or at least should anyway. I agree about the depression - it problem is worldwide and you can just feel there is something really big not far around the corner but then again I do always look at the worse case scenario with such matters.
I disagree with that. The Glazers are actually doing something rather clever if they are selling 25% of their voting share. They will remain majority shareholders and all they will be doing is making a rights issue which generates liquid capital. This in turn reduces their acquisition debt and gives the manager cash to invest in the playing staff. They on the otherhand may issue preference shares which carry no voting rights but do carry a fixed dividend, this also generates liquid capital which does what I said earlier. They are selling a quarter share for more than what they paid for a 1/3 share. This is good business and as long as they find a buyer then there isn't a problem. Simple finance always suggests that you ''buy low and sell high''. FSG did likewise with the NYT and Lebron James. It was reported that NYT sold their shareholding but to whom as of yet has been mentioned. Lebron James holds preference shares in FSG, although he didn't buy them (no cash changed hands). FSG hold his marketing rights and they can exploit him in Asia and make money from him whilst at the same time promoting him and this in turn promotes Liverpool and the Red Sox, which means that Lebron James benefits, Liverpool benefit, th Red Sox benefit and FSG benefit. There is a reason why this will be successful, as FSG already own 80% of NESN which means they have the infrastructure to deliver to a massive audience. FSG know what they are doing and they are going about it in the right way. They have proved that by spending a decent amount of money, but saved themselves a lot of money by ensuring they are not paying wages to people that they shouldn't be paying wages to. This is in my opinion good business.
The financial issue at United floating 25% is pretty obvious. At 25%, should a single institution buy it up, they would have no say in the running - 26% requires a seat on the board. As for why float at all - again, its obvious - credit across the globe is set to become harder to obtain and also considerably more expensive - if the world's largest economy has had its credit score downgraded and credit made more expensive consequently, what hope does do the Glazers have to refinance at an affordable level? As for Arsenal, you have to ask where all the money has gone if it isn't on transfer fees? Has it been bled away through agent fees and player wages? I suspect so. Is the scouting network so poor that they aren't able to locate top quality professionals to supplement the young talent they develop, or is it dogmatic determination to develop all his own players?
The problem is wider than we think. All of the wealth is heading East - there are now, for the first time, more billionaires in Asia than in the USA. Even more damaging than recession or hyper inflation is DEflation, which is what we're starting to see here in the West. As the Western economies shrink, so the ones in the East are growing, and this trend is going to continue unabated, at least for the short to mid term. Hence the logic of United floating in the the Eastern markets. It's a shrewd move which will raise them a lot of money.
F..k 'em. Let's hope it backfires like their last ploy did. I can't remember what it was. Was it a bonds issue or something?
