English Premiership

Man United's shares fall

2013-05-08 19:04
Manchester United (File)
New York - The shock retirement of legendary Manchester United manager Alex Ferguson sent the team's US-traded shares lower as analysts and fans wait to see who would succeed as the team boss.

United's shares sank more than five percent in initial trade after the announcement, but then pulled back slightly in sparse late morning deals for a 1.3 percent loss, at $18.52 a share.

Earlier on Wednesday, the Premier League champions shocked the sporting world when they announced that Ferguson will retire at the end of the season, ending the most successful managerial reign in English football.

GALLERY: Alex Ferguson in pictures

Ferguson, 71, guided United to 13 Premier League titles and two European Champions League crowns in 26 years in charge at Old Trafford.

He will remain at United as a director and club ambassador, and said he was confident he was stepping down with the team in good shape.

"The decision to retire is one that I have thought a great deal about and one that I have not taken lightly. It is the right time," Ferguson said in a statement.

United, owned by the family of US investor Malcolm Glazer, did not immediately name a replacement, but most speculation focused on Everton's David Moyes to fill Ferguson's seat.

Despite the fall, the shares were still trading more than 30 percent above the $14.00 initial public offering price last August.

At that time United shares barely treaded water amid worries over the team's ability to dig out from under a pile of debt.

But they rebounded beginning in November with improved quarterly profits thanks to a slew of sponsorship deals and substantial tax credits, as well as a reduction of the club's huge debt load, acquired in 2005 after the Miami-based Glazers' heavily leveraged takeover.

Analysts who follow the stock in London were confident in the financial future of the Caymans-based company which controls the team.

"Sir Alex Ferguson's departure from Manchester United at the end of the season will leave a chasm, which the replacement may find impossible to fill," Richard Hunter of Hargreaves Lansdown said.

Even so, he said, "The Manchester United merchandising machine will not grind to a halt overnight, and there is little reason to suspect that the club will not build further on the impressive third quarter results announced last week."

"Of the handful of analysts which cover the stock, the consensus of the shares as a buy is likely to remain intact."

"Given Sir Alex's influence over the club over the last 27 years it will take big shoes to fill the void left by his absence," said CMC Markets' Michael Hewson.

"The key question for investors is likely to be can any replacement live up to the high expectations that goes with such a high-profile position, in what has become a massive global brand, particularly in Asia."


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