Book building process

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The bookbuilding process (German also order book process ) describes a method of placement of securities in which interested investors within a specified subscription period of this offer in a given price range to the purchase and will be decided at the end of the period, which bidders to emitting the Securities at what price received.

General background

The Anglizismus dipped seen for the first time in connection with the issuance of the second tranche of British Telecom in the year 1991st It was part of the job of a consortium leader , the order book to lead (to build the book). Here the bids are collected and registered within the subscription period. At the end of the subscription period, the issuing company or the placing existing shareholder usually decides, together with the syndicate banks, which investors bid will be accepted. It is not only the amount of the bids that is decisive, but also the type of investor and a possible historical relationship with him.

Bookbuilding must therefore be clearly differentiated from both the fixed price procedure , in which an attempt is made to sell securities at a price set in advance, and the auction procedure , in which the highest bidder or investors are awarded the contract.

Anglo-Saxon procedure

The Anglo-Saxon process (also known as classic bookbuilding ) is a bookbuilding process in which a price range and the maximum possible number of shares to be issued are set in advance. More precisely, it is a process originating from the Anglo-Saxon region for determining a market issue price for shares , which, in contrast to the fixed price process, enables dynamic pricing. This procedure has also established itself as the standard in Germany since the mid- 1990s .

The bookbuilding takes place in several phases :

In the pre-marketing phase , the price range is agreed with large investors . The stock corporation striving for the IPO is looking for banks that want and can carry out the issue. These banks are exploring potential investors' interest in the new shares. Based on their non-binding price offers, the price range is determined and publicly announced in the marketing phase . Presentations of the company on the international financial markets ( road shows ) serve other potential investors to win.

This is followed by the actual bookbuilding ( order taking ): Institutional and private investors have the opportunity to submit their purchase orders (with a limit if necessary ) within a certain period of time . These buy orders consist of a price (which must be within the price range) and the desired number of shares that the investor would like to purchase at that price. At the end of this phase, an issue price will be determined based on the subscription requests made ( closing ).

All bids submitted below this price are excluded from the allocation of shares. Investors who would have paid a higher price than the final issue price will now buy at the issue price. If the quota of shares to be issued is exceeded, the actual allocation must be determined by the issuing syndicate or the number of shares to be issued must be increased (see greenshoe ).

Expedited procedure

In the accelerated or decoupled procedure, engl. Accelerated bookbuilding , on the other hand, puts the advertising tour first, with the aim of evaluating the asking price of potential investors more precisely. According to this, a usually narrower price range is given to possible investors, while the offer period is also limited to a shorter period, e.g. B. a few days. According to the WpHG, this leads to a subsequent change in the sales prospectus requiring approval, which must be published.

Decoupled process

In the decoupled process, engl. In contrast to the traditional marketing process, decoupled bookbuilding in the case of an IPO does not announce the price range with which the shares are issued before or during the roadshow, but only shortly before the order book is opened. Accordingly, the price range must be added to the securities prospectus retrospectively.

Decoupled bookbuilding has been possible since the amendment to the Securities Prospectus Act in 2005 and, contrary to the other book building processes, primarily relates to IPOs and not to follow-up transactions such as capital increases. The first company that successfully ventured an IPO using this process was Ersol Solar Energy AG.

A distinction is made between two types of decoupled bookbuilding. While with simple decoupled bookbuilding the price range and possibly the offer period are kept open, but the maximum number of shares to be issued is announced (and is also noted accordingly in the (securities prospectus)), with extended decoupled bookbuilding this maximum number is initially open and will be just like the other information in the securities prospectus, added later and announced in an ad hoc notification. In the opinion of BaFin , however, the latter procedure is no longer permissible since the securities prospectus is no longer permissible without specifying the number of units. The modified extended decoupled bookbuilding, on the other hand, specifies a maximum number for the newly offered shares in the securities prospectus right from the start, which, however, is subject to approval by the issuer's general meeting .

Pilot fishing

As a pilot Fishing an emerging trend since 2004 is known, targeted even before the first pre-marketing institutional investors ( core investors to address) to do with the IPO plans trusts and receive their respective professional opinion. The public is usually not yet informed of the plans at this point in time. First, the core investors, such. B. are particularly heavily invested in the relevant sector. Assuming that their behavior is the role model for many other investors due to their expert function and that their behavior suggests the possible behavior of a larger group of investors, they are asked to what extent adjustments should be made or whether an IPO should even be postponed. This tries to increase the likelihood of a successful placement.

Anchor marketing

As Anchor Marketing , a method is called, in which, similar to the pilot Fishing advance a range of selected institutional investors from the public is addressed, but it is not only a pure soliciting of opinions, but already some investors to subscribe to commit to a certain amount of shares.

See also

Individual evidence

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  3. ECM teams see 'fishing' as threat to their role ( Memento of the original from April 25, 2008 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice.  @1@ 2Template: Webachiv / IABot /