Secondary Equity Offerings:Structure & Regulation Update

Overview

Secondary equity offerings, such as rights issues, placings and open offers, have become increasingly popular in the last couple of years, as UK listed companies have been strengthening their balance sheets, refinancing bank debt and raising additional finance for corporate development. The challenging market conditions have also meant that the structures for these offerings have evolved, with increased use of deep discount rights issues and cash box placings as well as the emergence of compensatory open offers, cornerstone investors and new underwriting procedures.

This course looks at the way recent secondary equity offerings have been undertaken and regulated and considers the advantages and disadvantages for the issuer of each type of offering.

 Introduction

-  Current market trends

 UK regulation for UK equity issues

- Companies Acts and FSMA

-  Prospectus, Listing and Disclosure and Transparency Rules 

-  UK pre-emption requirements

 Structures for UK equity offerings

-  Rights issues

- Traditional and deep discount

- Shortened timetables

- Open offers/ placings with clawback and other placings

- New structures

-  Compensatory open offers

-  Cash box placings

-  Cornerstone investors

- Other combinations

 Means of marketing shares

- Institutional and retail offerings

- International tranches

-  US issues

-  Pre-marketing and marketing

 Price setting mechanisms

-  Fixed price

- Bookbuilding

-  The process

-  Accelerated bookbuilding

-  “Red herring” prospectus

-  Allocation, “Greenshoe” and stabilisation

Legal agreements

-  Underwriting agreements

- Placing agreements

 Possible developments

-   Rights Issue Reform Group proposals

-  Foreign models such as RAPIDS

 Which structure to use

-  Rights vs. open offer vs. placing

-  Fixed price vs. bookbuilding