Cornerstone Investors: A Practice Guide for Asian IPOs

Cornerstone Investors: A Practice Guide for Asian IPOs

by Philippe Espinasse
Cornerstone Investors: A Practice Guide for Asian IPOs

Cornerstone Investors: A Practice Guide for Asian IPOs

by Philippe Espinasse


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In this ground-breaking guide, former investment banker Philippe Espinasse explains the process of gathering cornerstone investors in connection with IPOs and other equity offerings. Using his trademark simple and jargon-free language, he details the targeting strategies, documentation, marketing, and allocation of shares and other securities to these reference shareholders, and analyses why and how they make or break today’s new listings across Asia’s key markets. This essential guide—and the first of its kind—contains key information on the legal framework for cornerstone investors in Hong Kong, Malaysia, and Singapore, and offers practical advice on how best to structure and conduct a cornerstone investor offering. It also discusses some of the more controversial issues associated with the practice of cornerstone investment and includes many real-life examples of cornerstone deals, sample documents, cornerstone investor profiles, an investor target list, and a comprehensive glossary.

Product Details

ISBN-13: 9789888455843
Publisher: Hong Kong University Press
Publication date: 01/04/2018
Pages: 256
Product dimensions: 7.00(w) x 9.00(h) x 0.80(d)

About the Author

Philippe Espinasse was a senior investment banker for almost two decades. He has worked on IPOs and capital markets transactions in 30 countries. He is the author of IPO A Global Guide and IPO Banks Pitch, Selection and Mandate and maintains a personal website

Table of Contents

Introduction 1

Part 1 Key parameters 5

Chapter 1.1 What are cornerstone investors? 7

Chapter 1.2 From early beginnings in Europe to three key Asian jurisdictions today 9

Chapter 1.3 Cornerstone tranches or corporate placings? 13

Chapter 1.4 Differences with pre-IPO investors 16

Chapter 1.5 Types of cornerstone investors and the US option 21

Chapter 1.6 Individual subscription amounts 29

Chapter 1.7 How many cornerstones are in an IPO? 30

Chapter 1.8 Tranche sizes and the question of liquidity 31

Chapter 1.9 What cornerstones bring to IPOs 34

Chapter 1.10 What is in it for the cornerstones? 36

Chapter 1.11 Obligations of cornerstone investors 38

Chapter 1.12 Anchor investors: Cornerstone investors by another name? 41

Part 2 The legal framework 43

Chapter 2.1 Hong Kong 45

Chapter 2.2 Malaysia 51

Chapter 2.3 Singapore 54

Part 3 How the process works in practice 57

Chapter 3.1 Defining the equity story 59

Chapter 3.2 The initial approach 60

Chapter 3.3 Targeting potential cornerstones 62

Chapter 3.4 Drawbacks of a 'free-for-all' approach 64

Chapter 3.5 Cornerstone marketing and multi-bookrunner syndicates 67

Chapter 3.6 The bookrunner script 69

Chapter 3.7 The non-disclosure agreement (NDA) 71

Chapter 3.8 What happens after the NDA has been signed 78

Chapter 3.9 Firming up the bids 84

Chapter 3.10 The subscription agreement 86

Chapter 3.11 Finalizing the allocations and settlement 100

Part 4 Issues associated with cornerstone investors 107

Chapter 4.1 Ethics 109

Chapter 4.2 Cornerstone investors: A way around market forces? 111

Chapter 4.3 Disclosure 113

Chapter 4.4 The lock-up requirement 115

Chapter 4.5 Recent developments 117

Conclusion 119

Appendix 1 Recent examples of cornerstone tranches in Hong Kong 123

Appendix 2 Older examples of cornerstone tranches in Hong Kong 129

Appendix 3 Recent examples of cornerstone tranches in Malaysia 132

Appendix 4 Recent examples of cornerstone tranches in Singapore 136

Appendix 5 Sample script for an initial approach to potential cornerstone investors by bookrunner banks 139

Appendix 6 Example of a non-disclosure agreement for potential cornerstone investors 141

Appendix 7 Example of an international cornerstone subscription agreement 152

Appendix 8 Selected profiles of cornerstone investors 169

Appendix 9 Target list of potential cornerstone investors (by jurisdiction) 205

Glossary 212

About the author 243

Index 244

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