January 26, 2007 / 1:47 PM / 12 years ago

UPDATE 2-French soccer club Olympique Lyon launches IPO

(Adds further CEO comments from news conference)

By Sudip Kar-Gupta

PARIS, Jan 26 (Reuters) - Olympique Lyon kicked off France’s first ever stock market listing of a soccer club, aiming to raise at least 84 million euros ($108 million) to help it compete financially with Europe’s elite.

The country’s league leader, which has won five consecutive national titles, said on Friday that it aimed to sell 3.7 million new shares at between 21.0 and 24.4 euros with an option to sell an additional 0.5 million in case of strong demand.

Olympique Lyon said it would seek to raise at least 84 million euros and could raise a maximum of around 96 million euros if it sells the extra shares.

The French soccer champions are expected to have a stock market capitalisation of around 300 million euros and their shares are due to start trading on February 9.

Commercial affairs have become increasingly important for soccer clubs in recent years, and Olympique Lyon currently lags rivals such as Manchester United, Chelsea and Real Madrid in terms of financial muscle.

“We want to create a European champion,” Chairman and Chief Executive Jean-Michel Aulas told reporters.

NEW MEGA STADIUM

Olympique Lyon was founded in 1950.

Its squad includes French international goalkeeper Gregory Coupet and Brazilian midfielder Juninho. OL has consistently reached the latter stages of the Champions League, a lucrative tournament fought out between Europe’s best teams.

Aulas, the club’s main shareholder and head of French information technology company Cegid, will keep a 33 percent stake in the club post-flotation.

Thirty-one percent of the shares will be open to the public, meaning it is unlikely that Olympique Lyon could fall prey to a hostile bid, as in England when Manchester United was acquired by U.S. businessman Malcolm Glazer.

Aulas said much of the new cash would be used to build a new 60,000 seat stadium, which is due to open in 2010.

He added the club would also develop a hotels complex and shopping centre. Aulas said diversifying its revenues in this way could help cushion OL against any slump in its fortunes on the pitch.

OL’s move to the stock market follows an unhappy period for many English soccer clubs who found themselves in financial difficulties after listing their shares.

Chelsea ran up huge debts before being taken over by Russian billionaire Roman Abramovich in 2003, while former English champions Leeds United came close to collapse before being delisted and rescued by a group of investors.

In its financial year to June 30, 2006, OL had sales of 166.1 million euros, or 127.7 million euros excluding transfer fees revenue, and a net profit of 15.9 million euros.

The share offer, being managed by BNP Paribas and Calyon, closes on Feb. 7. (Additional reporting by Nick Antonovics)

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