Why did Manchester United pick Singapore over Hong Kong?

This year has seen a string of listings in Asia by global brands. But most, like fashion house Prada and suitcase maker Samsonite, have selected Hong Kong as their listing venue of choice. Manchester United, on the other hand, appears to have plumped for Singapore.

According to various media outlets, the British football club is planning to raise $1 bn by floating in the city in the fourth quarter of this year. ‘The deal is on. It is in Singapore,’ a person familiar with the matter is reported to have told AFP.

The club, its advisors and the Singapore Exchange are all keeping quiet – at least on the record – about the floatation, leading to plenty of speculation about why Manchester United selected Singapore over other locations, in particular Hong Kong. Adding to the intrigue, media reports say Manchester United originally preferred Hong Kong but later changed its mind.

Alex Tamlyn, a partner at law firm DLA Piper, says the football club will see a number of benefits from listing in Singapore, according to an article from MarketWatch. ‘Manchester United has, in choosing Singapore, flown to greater liquidity, lower regulatory burden, and higher valuation,’ he says. ‘Singapore has a wider investor base [than Hong Kong] which will allow Manchester United to monetise its international brand across a broader geography.’

In the same article, Scott Sweet, senior managing partner at IPO Boutique, floated the idea that Singapore might have wooed Manchester United with an enticing offer. ‘It’s a far smaller exchange than Hong Kong, but it wants to be as active as it can be in getting high-profile names… Perhaps Singapore made the Glazers a very interesting offer,’ he says.

The Financial Times says observers were surprised that Hong Kong was passed over, given its strong retail base. It adds, however, that ‘the club’s advisers are understood to have thought Hong Kong’s investor base was too narrow, and were keen to show that United was not just a China-focused franchise.’

The likelihood is that a combination of these factors led Manchester United to consider Singapore the most suitable listing venue. But, of course, the floatation is not confirmed, and all this speculation could still amount to nothing.

[Article by Tim Human, Inside Investor Relations]

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