Are more football clubs set for flotation on the stock markets in 2013?

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<h1>Are more football clubs set for flotation on the stock markets in 2013?</h1><strong> Author: <a href='http://www.articleseen.com/profile_John Holland.aspx'>John Holland</a></strong><br /><p>When Rangers, the Glasgow football club, announced its intention to float on AIM in October 2012 there were many a raised eyebrow in the city. The Club had been forced out of the Scottish Premier League to the country’s fourth tier of football after being bought out of administration in June. Charles Green, chief executive of Rangers commenting on the AIM flotation, said the refinancing would allow institutional and retail investors to fund attempts to quickly regain its status in Scotland’s top flight. Mr Green’s company Sevco had previously bought Rangers assets out of administration for £5.5m. Since then he had unsuccessfully applied to have the new club remain in The Scottish Premier League. Part of his rationale for floating the club was to provide Rangers large and loyal fan base the opportunity to invest in their club. At the time, Mr Green said he hoped a successful flotation might see ownership of the quoted club split 20 per cent between its backers, 20 per cent among fans and 60 per cent by institutions. On 19 December Glasgow Rangers floated on AIM at a placing price of 70p. The price of the shares have traded at a premium ever since. The company raised over £22m and now, has a current market value of over £46million. A remarkable turnaround in a only a few months. The funds raised are to provide a secure financial future for the club, and update and develop the club's facilities. The club also want to fully capitalise on Rangers global brand and enable the club to enhance its playing squad when appropriate. The success of the Rangers flotation and the significant fundraising undertaken has once again ignited the debate about whether British Football clubs should float on the UK stock markets. There is certainly no shortage of clubs that require cash at the moment. It was Tottenham Hotspur who were the first UK club to float and since then many others have followed Spurs example, including some of the biggest clubs in the country, For example, Manchester United, Arsenal and Newcastle United. By the mid-1990’s 27 teams had floated on the UK stock markets. However by 2012 there were only a handful of football clubs that remained listed on the UK Stock Markets. Research seems to suggest that a flotation in itself does not have a great impact on the ‘on pitch performance’ of football clubs. In a study that considered the points won prior to and post flotation, on average, clubs did not increased their points per game tally after the flotation. The results suggest companies that floated used the funds raised primarily to address issues with their balance sheet. However, a flotation does allow football clubs to open up the opportunity for different investors to purchase a share of the ownership of the club, and this includes fans. So will Rangers high profile flotation spur other clubs in the UK to follow suit and float on The UK Markets?. Historically the stock market performance of football clubs has generally been poor and many football stocks were outperformed by companies in other sectors. Stock Market Investors have long memories and it seems unlikely that, the stock markets will be queuing up to welcome a new tranche of under performing football clubs, many with wage bills that eclipse those of highflyers in the city. </p><strong>About the Author:</strong><br />John Holland was the former head of the UK regional operation at the London Stock Exchange, with responsibility for both AIM and The Main Market. He has been advising companies since 1995 about stock market flotation and is a regular author of company finance and stock market publications and articles in business and financial press as well as various institutions on the internet. Visit <a rel="nofollow" href="http://www.hbcg.co.uk/aim-stock-markets/">http://www.hbcg.co.uk/aim-stock-markets/</a><p> Article Source: <a href='http://www.articleseen.com/Article_Are-more-football-clubs-set-for-flotation-on-the-stock-markets-in-2013_249783.aspx'> http://www.articleseen.com/Article_Are more football clubs set for flotation on the stock markets in 2013?_249783.aspx</a></p>

Article Source : http://www.articleseen.com/Article_Are more football clubs set for flotation on the stock markets in 2013?_249783.aspx

Keywords : Floating a company, AIM Stock Market, AIM flotation, floated on AIM,

Category : Finance : Finance