Singapore beat Hong Kong to lure the
initial stock sale of record 19-time English soccer champion
Manchester United Ltd. in part by assuring a speedier approval
process, bankers with knowledge of the matter said.
A pledge by Singapore Exchange Ltd. (SGX) to shrink the time lag
between IPO application and approval to as little as four weeks
-- from the usual two to three months -- was key to swaying
United, said the bankers, who requested anonymity as they’re not
authorized to discuss the deal. United plans to raise about $1
billion to reduce its debt burden and finance player purchases,
people familiar with the IPO said last week.
Singapore Exchanges Chief Executive Officer Magnus Bocker’s
push to lure United is a sign of increased competition between
the city-state and Hong Kong for IPOs by global brands. Hong
Kong, whose market capitalization is more than four times that
of Singapore, this year hosted offerings by Prada SpA, Glencore
International Plc and Samsonite International SA, extending its
lead as Asia’s premier venue for IPOs.
“If all the major listings are going to Hong Kong, people
might increasingly see the SGX as not as important,” said James
Koh, a Singapore-based analyst at Kim Eng Securities Ltd., using
an abbreviation for Singapore Exchange. “That’s why it’s good
to get a big catch like that.”
United applied for a listing on Aug. 18, according to the
people. The company expects to start gauging demand for the IPO
in mid-September and aims to begin trading in the first half of
the following month, they said. United has held talks with
Temasek Holdings Pte., Singapore’s state-owned investment
company, about buying shares in the IPO, according to the
people.
Time to Market
Bocker and listings head Lawrence Wong led the efforts to
woo United, the people said. Hong Kong’s bourse typically takes
one and a half to two months to approve an IPO application,
according to bankers familiar with the matter.
Manchester United spokesman Philip Townsend declined to
comment, as did spokespeople for Singapore Exchange and Temasek.
“Hong Kong’s listing process is efficient and HKEx aims to
keep it that way,” Hong Kong Exchanges & Clearing Ltd. said in
an e-mailed statement. “The process is interactive so there are
no typical cases, and there are fast-track cases from time to
time.” The bourse didn’t specify any cases where it has allowed
speedier approval.
Singapore isn’t competing with Hong Kong for IPOs, Bocker
said in an Aug. 23 interview. He declined to comment on United’s
offering.
Calling Bankers
“We are offering different things,” Bocker said. “Hong
Kong has been very successful in offering listings for companies
that want to have a very Chinese focus. Singapore has a very
strong offering for companies that want to have much broader
focus, reaching out to India, Southeast Asia and even to
China.”
Luring United may help Bocker, a 49-year-old Swede who took
the helm at Singapore Exchange in December 2009, recover from
setbacks including the failed attempt to acquire the operator of
Australia’s bourse, ASX Ltd. (ASX), for A$8.3 billion ($8.7 billion).
That deal was blocked by Australia’s government in April.
Glencore, run by billionaire Ivan Glasenberg, picked London and Hong Kong for an IPO that raised $10 billion in May. After
learning that Glencore was considering listing in Hong Kong,
Bocker called bankers working on the deal, asking them to
persuade the company to choose Singapore instead, a person with
direct knowledge of the matter said.
‘Sympathy’
Bocker flew to London before United was due to submit a
listing application to Hong Kong’s exchange, seeking to convince
billionaire owner Malcolm Glazer to pick Singapore, the Straits
Times reported Aug. 21, citing unidentified people.
United CEO David Gill and Chief Operating Officer Edward Woodward were in Singapore last week meeting with bankers and
exchange officials, a person with knowledge of the matter said.
“I’ve got a bit of sympathy for the Singapore Exchange,”
said Daniel Yong, head of the asset management practice at law
firm Norton Rose LLP in Singapore. People “don’t give credit to
the Singapore Exchange for the breadth and variety of listing
applicants that they try to attract.”
Hutchison Port Holdings Trust, an owner of port assets
controlled by Hong Kong billionaire Li Ka-shing, raised $5.5
billion in Singapore’s largest IPO in March.
Companies have raised $178 billion in IPOs in Hong Kong
since the beginning of 2006, led by the $17.8 billion sale of
AIA Group Ltd. (1299) in October last year, data compiled by Bloomberg
show. That’s more than seven times the amount garnered in first-
time offerings in Singapore over the same period.
Millionaire City
Hong Kong’s development as an IPO hub benefited from its
proximity to China, as Chinese companies buoyed to the country’s
economic expansion rushed to tap the city’s stock market.
Chinese companies account for nine of the 10 biggest IPOs in
Hong Kong’s history, Bloomberg data show.
“Hong Kong may have an advantage in terms of listing
Chinese companies because they already have a critical mass,”
said Ng Soo Nam, the Singapore-based chief investment officer at
Nikko Asset Management Co., which oversees about $154 billion.
“The more international names Singapore Exchange can get to
list here, the more they can attract.”
Bocker’s sales pitch to United also touched on soccer’s
rising popularity in Southeast Asia, the bankers said. United
estimates 190 million of its 330 million fans are in Asia.
Singapore, with a population of 5.1 million, has the world’s
highest concentration of millionaires.
Singaporean Peter Lim in October offered 320 million pounds
for Liverpool, the soccer team that finished sixth in the last
Premiership season. He later pulled the offer, saying
Liverpool’s board wouldn’t talk to him. Tony Fernandes, the CEO
of Malaysia’s AirAsia Bhd, this month agreed to buy Queens Park
Rangers, the west London-based soccer club newly promoted to the
Premier league.
“The appetite is big in Asia for the Premier League,”
said Fernandes in an Aug. 18 interview. “Singapore’s got lots
of capital and Manchester United is a very strong brand in
Southeast Asia. It’s a smart move if done correctly.”
extracted from bloomberg
