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SBD Global/August 22, 2012/Finance

Billionaire George Soros Takes 7.85% Stake In Manchester United

Billionaire investor George Soros has purchased a 7.85% stake in ManU.
U.S. billionaire George Soros has taken a 7.85% stake in ManU, "betting on the U.K. football team to score in the financial markets as well as on the pitch," according to Matthew Sparkes of the London TELEGRAPH. News of the investment, made via Soros Fund Management, "was released in an SEC filing after the closing bell rang on Wall Street" Monday. The 82-year-old now "owns 3,114,588 shares in the team but carries almost no voting power and will receive no dividend, thanks to the structure of the club's flotation" (TELEGRAPH, 8/20). FORBES' Agustino Fontevecchia reported that the investment "is a surprising bet for a savvy market player like Soros." Shares in ManU pay no dividend and essentially carry no voting power. After heavy defense by the underwriters in its first day in the N.Y. Stock Exchange, the stock "has fallen 6.7% to $13.06 by the end of Monday's trading session." At the same time, companies with a lot of exposure to the sports business "have performed well over the last year." Nike, which manufactures ManU's jerseys, is up more than 20% over the last 12 months, while Foot Locker has gained 93% (FORBES, 8/20).

HOUSE MONEY: REUTERS' Quentin Webb opined that history is littered with rich men "making trophy investments in sports." To Soros, whom Forbes reckons is worth about $20B, "this stake is peanuts." He "can do what he wishes" after cashing out the outside investors in his funds last year. However, he seems "too canny an investor to put his money in a loss-making plaything." More likely his fund, which Reuters data shows "has disclosed stakes in Wal-Mart, PepsiCo, General Electric, and more than 160 other companies," saw an opportunity to build a significant stake in an unusual business. Few sports clubs could claim to match ManU's global standing and "Midas touch with commercial partners." And none of the those clubs are listed (REUTERS, 8/21). In London, Jones & Massoudi reported that the move makes Soros "one of the club's biggest backers behind the Glazer family, who decided to float a portion of the club in N.Y. this month" (FINANCIAL TIMES, 8/21). The BBC reported that the 82-year-old investor has in the past "eyed other football clubs as lucrative investments." He considered a takeover of Italian club AS Roma in '08 but decided against it "due to the club's debt problems" (BBC, 8/21).
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