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IPO: A Gobal Guide

Philippe Espinasse
Copyright Date: 2011
Pages: 376
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  • Book Info
    Book Description:

    A practical guide to conducting intial public offerings (IPOs) for entrepreneurs, market practitioners and students. The guide explains, in a straightforward, jargon-free style, the pros and cons of turning private businesses into listed companies. It details the strategies, procedures, and documentation for different forms of listings, and explains the process of marketing and pricing an IPO. The guide include many real-life case studies, an extensive glossary of terms, a review of listing requirements for major stock exchanges, and sample documents. It also discusses recent developments in global equity capital markets.

    eISBN: 978-988-8053-57-5
    Subjects: Finance

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. List of tables and figures
    (pp. xi-xii)
  4. About the author
    (pp. xiii-xiv)
  5. Acknowledgements
    (pp. xv-xvi)
  6. Introduction
    (pp. xvii-xx)
    Philippe Espinasse

    I remember vividly the first initial public offering I worked on as a young and eager investment banker in 1994. I had joined what was then the largest investment bank in London as a graduate trainee with the 1991 intake. I spent the early years of my career writing briefing notes and working in the debt capital markets department, executing long-dated mortgage debentures and sterling-denominated bond issues for property developers, co-operative societies and brewers in the North of England. I longed for transactions that had a more international flavour and had just transferred to the equity capital markets (ECM) team,...

  7. Part 1 Defining the parameters
    (pp. 1-56)

    Going public—offering shares for the first time to third-party investors—is probably one of the most important decisions that can be made during the life of a company. For shareholders of family-owned businesses, it can provide a welcome source of liquidity for their holdings. But it also opens up their affairs to the scrutiny of outsiders. Through a flotation, entrepreneurial ventures can find an unparallelled source of capital to support their development. Investors buy initial public offerings (IPOs) because they offer them the opportunity to build a sizeable position in a stock, something that would in most cases be...

  8. Part 2 Getting ready
    (pp. 57-142)

    In addition to investment banks, a number of other parties must be appointed to execute an IPO. For all such third-party advisers, several fixed quotes to pay for their services will usually be obtained before appointments are made. It is now rare to pay legal or other advisers by the hour for an IPO, except perhaps for very small transactions.

    Most important are the legal advisers. There are generally “two sides” of legal firms in a primary equity transaction. Broadly speaking, one firm, or one set of firms, advises the issuer and another, the underwriters.

    The legal firm advising the...

  9. Part 3 Marketing the deal
    (pp. 143-186)

    All the major investment banks have active and sizeable sell-side research departments. These research departments support their sales and trading efforts in the secondary market across a variety of securities. In many countries, research is also important to assist in the marketing of IPOs to investors.

    On a macro level, banks have economists that advise their institutional investor clients on major market events, as well as strategists who make recommendations on asset allocation, based on trends and high-level market developments. Investment banks also often have research analysts covering currencies, commodities, fixed income and equity securities. On the equities side, in...

  10. Part 4 After the IPO
    (pp. 187-208)

    In every IPO and primary equity offering there is the possibility of immediate instability in the aftermarket, when the stock is traded between short-term buyers and sellers. This may, on occasion, affect the share price, which may temporarily fall below the offer price. It is therefore common for the issuer to appoint, generally from within the bookrunners, a stabilizing agent (also sometimes called a stabilizing manager) to go into the market and buy (or offer to buy) the securities to stabilize or maintain the price of the securities during the initial period after listing.

    There can only be one stabilizing...

  11. Appendix 1: Case studies
    (pp. 211-228)
  12. Appendix 2: Business and financial due diligence check-list
    (pp. 229-234)
  13. Appendix 3: Table of estimates for IPO fees and expenses
    (pp. 235-236)
  14. Appendix 4: Sample contents for an international IPO prospectus
    (pp. 237-238)
  15. Appendix 5: Sample risk factors for an international IPO
    (pp. 239-244)
  16. Appendix 6: Example of feedback form for investor education
    (pp. 245-246)
  17. Appendix 7: Example of manual order form for bookbuilding
    (pp. 247-248)
  18. Appendix 8: Initial listing requirements for major stock exchanges
    (pp. 249-272)
  19. Notes
    (pp. 273-276)
  20. Glossary
    (pp. 277-338)
  21. Further reading
    (pp. 339-342)
  22. Index
    (pp. 343-354)