IPO round-up

Welcome to Computershare’s quarterly IPO round-up, bringing you highlights from the registry world. 

Global IPO performance

2017 was a transformational year for our global IPO services. We worked on 31% of the IPOs within the UK, North America, Australia and Hong Kong markets, aiding our new clients in achieving an aggregated market capitalisation of approximately £91 billion.

Our global reach allows us to offer consistent solutions while maintaining specialist knowledge within major markets. We recently demonstrated this in North America with the direct listing of Spotify and our work in 2017 with RHI Magnesita N.V’s listing here in the UK. 

2017 saw more activity on the European, UK and North American exchanges when compared to the previous year, with the number of IPOs in Europe and the UK increasing by 38% and by 47% in terms of value when compared against 2016. The US saw an increase of 57% in the number of IPOs and the capital raised increased by a staggering 151% over 2016.

UK IPO performance

During the first quarter of 2018, we have worked on 50% of the IPOs that came onto the UK market compared to 21% in the same quarter last year, helping to raise a market capitalisation of £1.6 billion.

While the first quarter of 2018 has been relatively quiet in terms of the volume of transactions that have been completed, it is anticipated that Q2 and beyond will see an increase in activity as the UK remains attractive to international investors, especially ahead of Brexit.

Some analysts believe that IPO pricing will remain low until established brand names or companies with sincerely compelling stories come to market.

The UK IPO market will undoubtedly see the benefit of the Financial Conduct Authority (FCA) rule changes, including those affecting the timing of IPO documentation which will be effective on 1 July 2018, together with other changes including the relaxation of reverse takeover rules which came into force at the start of the year.

The recent announcement that the anticipated Saudi Aramco listing has been delayed could result in a delay in other state-owned enterprises considering a listing. Also, UK investors are remaining cautious of companies who have turned to an IPO following failed M&A activity. As a result, 2018 could see an increase in postponed or withdrawn IPOs, similar to what we saw with the likes of Cabot Credit and Helios Towers. Regardless of these events, global indices continue to break records, which makes sure that investor confidence remains strong and continues to encourage a healthy pipeline across all sectors and markets.

Top 10 differences between a DI and a CDI

How can overseas securities be traded and settled through CREST? And how well do you understand the differences between a Depositary Interest (DI) and a CREST Depositary Interest (CDI)? Both of which are frequently used to facilitate listings for overseas companies.

We are often asked about these services and frequently people confuse the two or assume they provide the same solution. However, there are some key differences between the DI operated by Computershare and the CDI operated by Euroclear UK and Ireland. Below you can find the top 10 differences, which should help you to decide on the best solution when seeking a listing within the UK. Of course, we are always happy to discuss these and other factors when considering a listing of overseas securities on a local exchange.

Case study: WorldPay acquisition by Vantiv Inc.

During 2017, The London Stock Exchange (LSE) approached our Cross-Border Solutions Director, Charlie Hodge from our Global Capital Markets team, and asked if we could present a global register solution to Vantiv Inc. in respect of their planned £8 billion acquisition of WorldPay Group PLC. They wanted a solution that, post-acquisition, could support a listing on both the New York Stock Exchange (NYSE) and the LSE. Subsequently, Charlie was contacted by the legal advisers to Vantiv Inc. asking for our advice and guidance on this transaction due to our expertise and strong track record of delivering solutions and services for complex cross-border activities.

Through our work with the advisery teams, a seamless solution was created and implemented which resulted in Vantiv Inc. appointing the Computershare team to not only  manage the corporate event, but also to be appointed as their US transfer agent and provider of DI services in the UK, switching from their current service provider, ahead of the corporate event.

Both the Vantiv Inc. and Worldpay Group PLC registers had their own complexities and diverse shareholder bases that needed to be harmoniously combined, with WorldPay operating both an LSE listing and an American Depositary Receipt (ADR) programme, and Vantiv maintaining a NYSE listing and having an unsponsored CDI supporting investors in the UK.

With our unique global Computershare solution and deep understanding of major markets, we developed the settlement structures which included:

• the provision of US Transfer Agent services - registry
  
• DI services - for former Worldpay holders and the migration of Vantiv CDI holders
• corporate actions - for the migration of the Vantiv and Worldpay shareholder records to Computershare and consideration distribution, and
• ongoing cross-border repositioning services

All of which were tailored to make sure that the combined shareholder base was accommodated post-event with the trading of a single fungible share class that is available on both the NYSE and the LSE.

Through transactions such as this, we are able to truly demonstrate the strength and unique nature of our global services, local and cross-border expertise, which on this occasion required activities across 15 Computershare teams, managed and coordinated by our dedicated Global Capital Markets team.

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