Malaysian billionaire Vincent Tan is exploring an IPO of British soccer team Cardiff City for as early as this year, people with knowledge of the matter told Reuters, in a deal that would follow the team's recent promotion to the Premier League.
The process is in its early stages, the people said, with details on the timing, size and listing venue subject to change.
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A listing would come after Manchester United Plc's debut on the New York Stock Exchange last year, which raised $233.2 million in the largest sports team IPO ever. But prospects for the Welsh team, which does not have Manchester United's track record or as wide a fan base, are unclear.
"There's a pretty mixed history of sport clubs with their IPOs. It's more an emotional investment than a rational one," said Philippe Espinasse, a former investment banker with Nomura and UBS in Hong Kong and author of 'IPO: A Global Guide'.
"I can understand that Manchester (United) was trying to list in Singapore because there is a very big fanbase of Manchester United in Southeast Asia, but it doesn't look like this is one of the major clubs."
Tan, who owns 36.1 percent of the club and is the former chairman of conglomerate Berjaya Group, has engaged at least one investment bank to lead the process, according to the people.
The initial plan is to list the club on the Kuala Lumpur Stock Exchange, one of the people said. The deal may be completed as early as this year, another person said. The sources declined to be identified as the information was not public.
The proposed deal, like any corporate transaction in its early stages, may go ahead, change direction, or be scrapped altogether.
Tan was unavailable for comment. He is Malaysia's tenth richest person with a net worth of $1.3 billion, according to Forbes.
Malaysia's IPO market, normally among Asia's quietest, roared to life last year with several multi-billion dollar listings, lifting the Kuala Lumpur exchange to rank No. 4 globally for new listing proceeds.
Still, should Tan and his advisers elect to list the club on his home turf, the listed entity would stand in stark contrast to the predominantly local groups on the Kuala Lumpur exchange.
Unlike Singapore or Hong Kong, two cities with a large international investor presence and an array of multi-national corporations, Malaysia's equity market is made up mostly of domestic funds investing in local companies.
Bankers for the IPO will also have to deal with the thorny problem of valuing sports clubs. Underwriters for Manchester United pitched the club not as a sports franchise but as a global consumer brand, something Cardiff City will find tough to argue as the club's promotion to the English Premier League comes after a 51-year absence.
Promotion to the Premier League is estimated to be worth at least 120 million pounds ($181 million) to clubs over the next five years because of access to a share of lucrative television rights deals.
Cardiff were on the brink of administration and escaped a winding-up petition at the High Court in 2010 after settling a 1.9 million pound tax bill.
Tan has sought to increase the club's marketability, especially in Asia, although his decision to change their traditional blue kit to red sparked controversy. Nicknamed the Bluebirds, having played in blue for over 100 years, Cardiff now have a red badge featuring a dragon, an emblematic beast both in Wales and Asia.
Although revenues will rise, clubs like Cardiff will need to invest heavily in new players to ensure that they are competitive in the Premier League.
Its recent fortunes run counter to another team owned by a Malaysian. Tony Fernandes, chief executive of Malaysia's Air Asia, saw his Queens Park Rangers relegated from the Premier League in what he called a "tragic" season. ($1 = 0.6638 British pounds)
(Additional reporting by Elzio Barreto in Hong Kong and Keith Weir in London; Editing by Michael Flaherty and Edwina Gibbs)