A Placing is a share issuance method where securities are offered directly to selected institutional investors rather than the general public.
Placing vs Public Offer
| Feature | Placing | Public Offer |
|---|
| Investors | Selected institutions/professionals | General public |
| Speed | Days | Weeks/months |
| Cost | Lower (less marketing/underwriting) | Higher |
| Pricing | Negotiated | Fixed or bookbuild |
| Marketing | Targeted | Broad public campaign |
Types of Placing
| Type | Process | Timeline |
|---|
| Firm Placing | Pre-committed, underwritten | Several days |
| Accelerated Bookbuild | Rapid process | Often overnight |
| Marketed Placing | Investor presentations | 1-2 weeks |
| Vendor Placing | Acquisition consideration shares | Varies |
Prospectus Requirements
| Scenario | Prospectus Required? |
|---|
| >150 persons or >€8m | Yes |
| Main Market admission | Yes |
| Private placement to qualified investors | No (exempt) |
| AIM admission | No (Admission Document instead) |
Pre-emption Rights
UK companies must navigate:
| Requirement | Description |
|---|
| Statutory pre-emption | Existing shareholders have first refusal rights |
| Disapplication | AGM resolution needed to waive pre-emption |
| Pre-Emption Group guidelines | Institutional expectations: 5-10% annual authority |
Common Uses
- IPO fundraising (initial admission)
- Growth capital (expansion, acquisitions)
- Balance sheet repair (financial strengthening)
- Vendor consideration (M&A transactions)
Market Practice
- Discount: Typically 3-10% below market price
- Lock-ups: Investors may agree not to sell for period
- Placing agreement: Legal contract between issuer and agent
