The IPO process involves several entities, such as the issuing company, institutional investors, brokers, lawyers, regulators, retail investors, and an intermediary company.

Consider the following IPO deal:

On August 10, 2012, Manchester United PLC (MANU), a professional soccer team in the English Premier League, went public with the sale of 16,666,667 shares of Class A ordinary common shares for $14 per share. The sale, which raised $233,333,338, was led by the Jeffries Group, Inc. and conducted with assistance from Credit Suisse Group AG and JP Morgan. All three institutions served as bookrunners for the offering. A variety of other banks across the world participated in the sale by offering shares to their customers.

Shares sold in the IPO were both newly created shares as well as those provided by the Malcolm Glazer family, the owners of MANU prior to the offering.

Which firm is the lead underwriter of the MANU IPO?

The Glazer family

Credit Suisse Group AG

The underwriter in the IPO process has several responsibilities.

True or False: The underwriter is likely to promote the shares by distributing analyst reports on the stock to its associate brokerage house.

True

False

Assume that a stock-issuing firm has a choice between a private placement selling the shares for $36.00 per share or a best efforts offering that will sell all available shares at the prices described in the following probability distribution:

Best efforts expected probability distribution

	Probability	Selling price
Lowest quoted price	20%	$32.00
Mid-range price	30%	$36.00
Highest quoted price	50%	$42.00

Assuming that the issue is fully subscribed, or sold, which method would generate the most capital for the issuing firm?

Best efforts sale

Private placement