22 February 2017

Analysis of the successful 2015/2016 IPO season

During the financial crisis and the years thereafter, the number of IPOs (beursgangen) in the Netherlands was limited. The last one-and-a-half years has seen a reversal of this trend — all the more remarkable as the general IPO climate in Europe and the United States during this period was weak. There are various reasons for this trend, ranging from the presence of interesting candidates in the Netherlands and Government privatisations to the front-loading of transactions in order to avoid the Brexit referendum.

The nature of the 15 IPOs in this period differed. In some of the IPOs, existing shares were listed on Euronext Amsterdam, but no (new) shares were offered to the public. Others were traditional IPOs in which not only were institutional investors targeted but in which a tranche of shares was also reserved for retail investors. Compliance with the Dutch Corporate Governance Code is generally very good. The major deviation from the Code appears inspired by the wish of selling (private equity) shareholders to retain some influence during the period in which they sell down their interest in the newly listed company

There is little news to report on defense mechanisms, with protective preference shares being the instrument of choice and certain sellers deciding not to implement any defense mechanism. From a capital markets perspective, the IPOs were structured more or less in line with international practice. It seems unlikely that the near future will see a similar large number of new listings in the Netherlands. Euronext Amsterdam and the Dutch N.V. are nonetheless still attractive for selling shareholders, issuers and investors alike. The economic climate and market conditions seem, at the time of writing this article, to be conducive to further listings. Accordingly, there are no immediate grounds for worry about the viability of the IPO market in the Netherlands.

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Source: Tijdschrift Ondernemingsrecht 2017/24 – February 2017

Authors: Jan Willem Hoevers and Vivian Lee.