A flotation could help reduce a debt pile that has helped make the owning Glazer family, from the U.S., deeply unpopular with many fans, helping inspire slogans such as "Love United, Hate Glazer" brandished by some supporters.
This debt could also see United struggle to meet "Financial Fair Play" rules put forward by football's European governing body UEFA, one of the aims of which is to limit the amount of borrowing clubs can take on.
A Singapore initial public offering (IPO) would be a second stock market incarnation for the club, which was listed in London before being taken over by the Glazers in 2005.
Banks Credit Suisse and UBS were close to winning the mandate for the IPO, a Reuters source with knowledge of the deal said. IFR, a Thomson Reuters publication, reported Morgan Stanley was also in the running.
Sources could not confirm whether United's potential offering would include existing shares, which would involve the Glazer family cashing in some of their stake.
Despite their unpopularity among fans, the Glazers have consistently said they do not plan to sell the club, making it more likely they plan to issue new shares to raise funds which could be used to reduce the club's huge debt.
This month, Britain's Sunday Mirror tabloid reported the Glazers were looking to sell as much as 25 percent in a share offering. It was unclear whether the $1 billion figure related to the sale of a stake of this size.
United have an estimated 333 million fans globally and more than 190 million in Asia.
As with many other English football teams, Asia has become an important growth area for the club, with media speculation in recent months suggesting Hong Kong as the most likely destination for an IPO.
Bankers say European companies hoping to pull off a successful float in Hong Kong need a strong China connection.
"[United] has a huge fan base out of Asia, and Singapore is viewed as a bit more of a pan-Asian exchange. Hong Kong is very much China-facing," said one banker.
"Maybe they feel that with the attraction of the entire Asian fan base, Singapore is more of a neutral venue, rather than tying all their flags to a China story."
NET LOSS
One source said the loss-making club had switched to Singapore from Hong Kong, which has become the venue of choice for global brands such as fashion house Prada SpA and cosmetics maker L'Occitane International , but did not give a reason.
Hong Kong bars unprofitable companies from listing on its exchange. United's 2010 full-year results showed gross debt attached to the club of 522 million pounds, with a net loss of 84 million pounds.
The Glazer family, which took United private following a 790 million pounds takeover in 2005, has endured a turbulent spell at Old Trafford. Fans have taken to wearing the original green and yellow colours of United's predecessor club, Newton Heath, in an anti-Glazer campaign.
The Americans have been criticised by supporters who are uncomfortable with the club's debt, despite continued on-field success, most recently last season's record 19th league title.
A multi-million pounds summer signing spree of players including England star Ashley Young may have helped assuage fan concerns, along with an opening day 2-1 league victory against West Bromwich Albion.
The IPO of a globally recognised brand such as Manchester United would be a coup for Singapore, which has been competing with Hong Kong for international listings.
Despite winning the biggest IPO in Asia-Pacific during the first half of 2011 - the $5.45 billion
