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Euromoney Learning Solutions

Initial Public Offerings (IPO) & Equity Capital Markets

Available dates

Nov 18—20, 2019
3 days
London, United Kingdom
GBP 3395 ≈USD 4374
GBP 1131 per day

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About the course

Be prepared for the execution of a successful IPO, understand equity capital

This programme is designed to enable participants to become proficient in their understanding of the IPO process. It covers a broad spectrum of topics which are designed to ensure that participants are equipped with the financial skills-set necessary to understand how IPOs are arranged, managed, priced and distributed.

The course features:

  • Strategic considerations; flotation or sell
  • The due diligence process
  • Corporate restructuring steps pre-IPO
  • Selecting the right exchange for the floatation
  • IPO valuation
  • Multiple based valuation methodologies
  • Accounting scams
  • Marketing the IPO
  • IPO underwriting
  • IPO issues
  • Investor strategies in an IPO
  • Secondary offerings
  • New developments in IPO business

The course provides participants with a working knowledge of the principles and practices of the launch of companies on an exchange by means of IPO. It ensures that participants acquire a sufficiently thorough understanding of the subject.

Agenda

Day 1: IPO preparation and planning

Session 1 – The decision to float

  • Why float?
  • Exit strategies for existing shareholders
  • Strategic considerations: float or sell?
  • Evaluating the alternatives: the advantages and disadvantages
  • Pre-conditions to a flotation: not all companies are suitable
  • Selecting the market: AgBank dual listing
  • Selecting financial advisers
  • Investment bank conflicts

Case study: US IPO failure

Session 2 – The due diligence process

  • The objective of the due diligence exercise
  • The long form report
  • Legal due diligence
  • Investigation of the suitability of directors
  • Evaluating the competitive position
  • Accounting policies and window dressing

Case study: Due diligence issues

Session 3 – Restructuring and prospectus issues

  • Essential corporate restructuring steps pre-IPO
  • Selecting the appropriate capital structure
  • Organising the issuer to provide the resources
  • Timetable considerations
  • Prospectus responsibility – whose?
  • Listing requirements – selecting the right exchange for the flotation
  • Senior versus junior market (Main board v GEM)

Case study: Review of senior and junior markets

Session 4 – IPO documentation

  • Documents needed
  • Detailed timetable content for HK
  • Lock-up agreements
  • American depositary receipts (ADRs and Global DRs)
  • Prospectus responsibility – whose?

Exercise: Review of key documentation: Rusal IPO

Day 2: IPO valuation and marketing

Session 1 – IPO valuation

  • Capital structure and its impact on value
  • Weighted average cost of capital (WACC)
  • Valuation using WACC
  • Capital asset pricing model (CAPM)

Case study: Computation of cost of equity, cost of debt, WACC, regearing beta

Session 2 – Using WACC

  • Preparing cash flows
  • The forecast and terminal value periods
  • Calculating cost of equity
  • Calculating WACC
  • Selecting beta

Case study: Computing WACC and adjusting for differences in gearing

Session 3 – IPO valuation based on WACC

  • Growth rates in the terminal value period
  • Common mistakes in WACC
  • Forecasting reinvestment
  • Return on invested capital
  • Pre-IPO research: Orange Telecom

Case study: Spin off valuation using WACC

Session 4 – Multiple based valuation methodologies

  • The price earnings ratio (PER)
  • Valuation using PER
  • Comparable company analysis
  • Theoretical background
  • Strengths and weaknesses
  • Alternative multiples
  • Ratios based on earnings before interest and tax (EBIT)

Case study: IPO valuation using PERs and EBIT ratios: AZ, Asian chemicals company listing in London

Day 3: Marketing and underwriting the IPO

Session 1 – Valuation of special case companies

  • Valuation of companies with sales but no profits
  • Valuation of companies with no sales
  • Valuation of mining companies
  • Valuation of property companies
  • IPO bubbles

Exercise: Participants value a series of non-standard IPOs

Session 2 – Marketing the IPO

  • Book-building/placing as an issue method
  • Offers for sale as an issue method
  • Introductions
  • The role of the analyst
  • Roadshows and company visits
  • Preparing the management

Case study: The overallotment option/Greenshoe

Session 3 – IPO Underwriting

  • Hard and soft underwriting
  • The financial risk in underwriting
  • Underwriting as an option
  • Competition issues in fees charged
  • Underwriting in public offers

Case study: Review of the underwriting risk in a book-built issue

Session 4 – IPO abuses in the TMT boom

  • In-house financial analysis
  • Third party research
  • Bidding or indicating interest
  • Aftermarket orders – a possible abuse
  • Other abusive practices covered in the Global Settlement

Case study: Recent developments in IPOs: the Open IPO and competitive tender

Course summary and close

Who should attend

  • executives and managers
  • professionals in all functions
  • investment and commercial bankers
  • equity and fixed income investment managers
  • investment and analysts
  • credit analysts and credit controllers
  • treasury managers and staff
  • lawyers and newly-qualified accountants
  • company brokers and advisers.

Trust the experts

Serge Vidal

Serge is an experienced Corporate Finance professional with over 20 years’ experience in M&A and capital market transactions. He has successfully completed in excess of EUR 30 billion across multiple geographies (US, Europe, MENA).He began his career as a Credit Analyst at Banque Continentale...

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