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In a rights issue, the offering and placement begin following the disclosure of the Prospectus and the release of the notice for the exercise of subscription rights of the new shares to be issued.
The offering period normally takes 2 to 3 weeks, considering the period of no less than 15 days that is legally granted to shareholders for the exercise of their subscription rights. The subscription right is granted for each share held by the shareholders. The Company defines the number of new shares that each shareholder may subscribe. Accordingly, shareholders will have the right to subscribe new shares proportionally to the number of shares they hold at the beginning of the offer period.
During the offering, the shareholders may subscribe the new shares or sell their pre-emptive rights privately or in the stock exchange.
Due to the offering being limited to shareholders and holders of subscription rights, management roadshows are less frequent and less expensive in comparation with those of the IPOs. Nonetheless, the Company may find it valuable to proceed with the roadshow, depending on the size of the offering, to boost investors’ interest.
Recommended reading: 3.1.1.3.1 Management roadshow.
3.2.3.1. Pricing
Differently from an IPO, in a Secondary Offer the Company’s shares already have a known market price. Rights issues normally allow the subscription at a lower price than the share price in the market, to encourage investors to exercise their rights of subscription of new shares.
3.2.3.2. Allocation of the new shares
The new shares are distributed among the holders of subscription rights in the Offer as follows:
3.2.3.3. Assessment of Results, Settlement and Listing
At the end of the offer’s period, the results are immediately assessed and disclosed, either by the Financial Intermediary assembling all the acceptance statements, or in a stock exchange special public session of the market.
Prior to Admission to trading, the Company needs to proceed with the registration of the share capital increase with the competent commercial registry office, a formality necessary for the settlement of the offer.
The shares will only be effectively admitted to trading on the stock market once the commercial register and the settlement have been finalized.
