Course description
Initial Public Offerings (IPO) & Equity Capital Markets (ECM)
This two-day training covers the main characteristics of Equity Capital Markets. Participants will start by covering the main functions of the capital markets, including the key players, markets, banks and investors. Using real life case studies, they will go through in detail Initial Public Offerings including drafting the prospectus, the roadshow, the book-building, pricing, allocation of shares and price stabilisation mechanisms. Participants will discuss the different types of follow-on offerings, namely private placements, accelerated book-buildings and rights issues as well as public takeovers. Finally, participants will review equity valuation in the context of an IPO pricing and share allocation.
Upcoming start dates
Training content
Day One
Session 1
Capital Markets Fundamentals
In this session participants will cover the main functions of the capital markets. Most importantly, the key players, banks and investors are covered in detail. Participants will then examine the life of a corporate and review the funding options
- What financial markets do?
- Who are the major players?
- Domestic and international capital markets
- Debt versus equity
- Primary versus secondary market
- Distinguishing between retail, corporate and investment banking
- Buy side versus sell side
- League tables, equity underwriting
- Where transactions take place: Exchanges vs. OTC vs. ECNs
- The buy-side industry/investors
- Active vs. passive investment management
- Placing an order
Session 2
Equity Products
In this session we introduce the different types of equity, their description and significance
- Ordinary shares
- Authorised, issued, outstanding and free float
- With one voting rights or with different voting rights
- “Cum-div” and “ex-div” price
- Corporate governance
- Preferred stocks
- Equity warrants
- Convertible debt
- Issuer motivation and investor base
- Bond floor and option value
- Issuer call
Session 3
Equity Capital Markets
In this session we introduce equity markets and products. We will drill down on the characteristics of equity and equity valuation. We will introduce the life-cycle of equities. We will also look at the differences between primary and secondary shares and primary and secondary markets, including motivations of investors.
- Company life cycle, pros and cons
- Primary vs. secondary markets
- Main equity markets
- What is an IPO, a secondary offering?
- What are primary shares, secondary shares?
- Equity markets and trading systems
- Criteria for admission and voting rights
Session 4
Initial Public Offerings
This session focuses entirely on the characteristics of IPOs. We will focus on analysing the Facebook IPO.
- ECM functions
- Origination and execution
- Syndicate desk
- Sales team
- Banking roles (bookrunner, manager, underwriter) and fees
- Best efforts vs. underwriting
- International offerings vs. Dutch auctions
- Steps in equity offerings
- Prospectus
- Roadshow
- Underwriting
- Share allocation
- Price stabilisation mechanism/greenshoe
- What are the criteria of a successful IPO from vendors and banks viewpoint
Session 5
Follow-on Offerings
During the final session of our training, we will focus entirely on the characteristics of the different type of offerings available following the Initial Public Offering. We will analyse the Barclays right issue in detail.
The need for re-capitalization and follow-on placements
- Process and recent market deals
- Pros and cons of various processes
- ABBs (Accelerated book build)
- Block trades
- Overnight public offering
- Rights issues
- Depositary receipts (eg, GDR, ADR, etc.)
Day Two
Public Takeover, Equity Valuation and IPO Pricing
Session 1
Public Takeovers
During the final session of our training, we will focus on the Public Takeovers and the different rules that apply.
- Public takeovers vs. private transactions
- General principles of the takeover code
- Mandatory offer
- Squeeze-out mechanism
- Offer price
- Counter-offers
- Timetables
- Bidder’s strategy and tactics
- Different types of buy-side approaches: from friendly to bearhug and hostile
- Target’s defense strategy and tactics
Session 2
Equity Valuation
During this session, we will discuss the main equity valuation methods to derive a price for the equity offering
- Determining fair value of the equity for an IPO
- Trading comparables and discounted cash flow analysis (DCF)
- Discount to fair value in the primary market
- Value range and decision on final pricing for allocation
- Trading comps as the main driver
- Enterprise Value vs. equity multiples
- Lack of cash flows and valuation methods
- The five steps of DCF
- Free cash flow
- Terminal value
- Weighted average cost of capital
- Discounting cash flows to present value
- From enterprise value to equity value
Session 3
Role Play on Valuation/IPO
During this session, we will perform basic modelling impact on the company and shareholders
- Assessment of fair value: DCF and trading multiples
- IPO modelling review
- Pre-money and post money valuation
- Earnings per share accretion and dilution
Course delivery details
This course is being offered as a hybrid course with Participants able to attend in-person in London or virtually via Zoom. If you would like to book on to the virtual course, you can do so on the location menu to the right and select virtual.
Costs
Course fee: £2645 + VAT
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Euromoney Learning
At Euromoney Learning, we understand that learning doesn’t start and end when you leave the classroom. We know that the financial markets never stand still, and that technology has both simplified and added complexity at a break-neck pace. That’s why...