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SBD Global/March 12, 2014/Finance

U.S. Investment Firm Baron Capital Builds Up Stake In EPL's Manchester United

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Baron's investment represents about 5.8% of ManU's $2.6B market value.
U.S. investment firm Baron Capital "has bought nearly a quarter of all publicly-traded shares" in N.Y.-listed ManU, according to the AP. In '12, ManU owners the Glazer family sold 10% of its holding in the club via a stock listing. A filing Monday on the Securities and Exchange Commission showed Baron Capital "now owns around 24 percent of those shares." On its website, Baron says it "remains positive" on ManU's prospects (AP, 3/11). REUTERS' Keith Weir reported Baron's investment represents about 5.8% of ManU's $2.6B market value, but a dual-share structure means that the Glazer family "remains firmly in control of the club." However, it is "a vote of confidence" for ManU in a season in which the team "has struggled on the field and risks missing out on a lucrative place in the Champions League for next season" (REUTERS, 3/11). The PA reported analysts believe that the accumulation of shares reflects Baron viewing ManU "as a good long-term investment," rather than it "making any bid to secure a controlling interest in the club." Baron's actions "explain why the share price has been slowly rising despite the club's struggles on the pitch." This has also been "fuelled by expectation" of an announcement of a new Nike kit deal worth a reported $1B. London-based financial analyst Andy Green, who writes a blog on football finance and advises the ManU Supporters' Trust, said that the move by Baron "appeared to be purely an investment strategy and was not the start of a takeover bid." Green: ''You could buy all the shares available on the stock market and you would still only have 10 percent of the club and about 1.3 percent of the votes" (PA, 3/11).

NO GAME-CHANGER: In London, Roger Blitz reported a note on the Baron website about its holding said that ManU’s shares "had dropped in value in the fourth quarter because of delays in the signing of a new global merchandising deal with Nike." Baron said, “The Nike deal is still expected to be signed, but has been pushed out from this fiscal year. We remain positive on the company’s prospects going forward” (FINANCIAL TIMES, 3/11). Manchester Evening News Head of Business Adam Jupp said, "It's interesting but it's not a game changer. What it shows is despite the on-pitch struggles the club is still seen as an attractive investment" (MANCHESTER EVENING NEWS, 3/11).
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