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Initial public offerings


What are the most common structures used for IPOs in your jurisdiction, and what are the advantages and disadvantages of each?

The main methods of issuing shares in an initial public offering (IPO) are:

  • offers for subscription – the issuer makes an offer to the public to subscribe for newly issued shares; and
  • offers for sale – one or more selling shareholders makes an offer to the public to purchase shares already issued.

Most Austrian IPOs are a combination of these two options, as this permits shareholders to exit part of their investment while the company receives fresh money from the IPO.

Procedure and timeframe

What is the procedure and typical timeframe for launching an IPO?

The timetable for launching an IPO is usually six to 12 months. This depends on various factors, such as:

  • whether a dual or single listing is sought;
  • whether certain pre-IPO restructurings need to be completed; and
  • the time that it takes to prepare the equity story and business plan.

The initial phase involves:

  • appointing consortium banks and the arranger, as well as consultants and advisers;
  • conducting legal, financial and business due diligence;
  • carrying out limited pre-marketing;
  • conducting research activities; and
  • preparing the prospectus.

The main phase involves:

  • submitting the prospectus to the prospectus approval authority (the Financial Market Authority (FMA));
  • obtaining approval of the prospectus from the FMA;
  • filing an application for listing with the Vienna Stock Exchange (VSE);
  • registering any increase in share capital with the commercial register;
  • conducting a public marketing campaign;
  • processing admission for listing from the VSE;
  • bookbuilding and pricing; and
  • publishing a pricing supplement.

The post-phase involves:

  • transferring proceeds from the offering (minus commissions and expenses) to the issuer; and
  • performing stabilisation.

Due diligence

What due diligence is required and advised in the IPO process?

In a typical IPO process, due diligence will relate to legal (including regulatory, where relevant), financial and business due diligence in respect of the IPO company’s operations and business plan. This will cover both documentary due diligence and discussions with management. Material findings from the due diligence will be disclosed in the prospectus.

Pricing and allocation

What rules and standards govern share pricing and allocation in the context of an IPO?

Under the rules introduced by the EU Markets in Financial Instruments Directive (2014/65/EU) (MiFID II), underwriters are required to keep records of allocation decisions including:

  • their “overarching allocation policy”;
  • discussions with issuer clients and the agreed proposed allocation per type of investment client;
  • the content and timing of allocation requests received from each investment client with an indication of their type;
  • any further discussions and instructions or preferences on the allocation process provided by the issuer client, other members of the syndicate or the firm itself, where relevant; and
  • the final allocations communicated to each individual investment client.

In addition, underwriters must provide justification for the final allocation made to each investment client, including detailed reasoning, unless such detail has been provided through the records maintained above.