(BFM Bourse) – The British-born fintech has chosen to land in France, the bridgehead of its European deployment, to deploy its offer to open all fundraising by listed companies to all investors. This service is already open to customers of Bourse Direct, Boursorama and EasyBourse.
Traditional capital increases, with maintenance of preferential subscription rights, entail a certain number of constraints – in particular in terms of timing and flexibility to set the price in relation to the prices preceding the transaction. Many companies, especially among companies that are not yet self-financing their growth, such as biotechs, often opt for private placements. In other words, capital increases reserved for institutions capable of putting a ticket of the order of 100,000 euros at least, for a negotiated price, which makes it possible to raise the funds concerned in a few hours.
Of course, the general meeting must have authorized each company to launch this type of operation, within a certain limit of existing capital, when management deems it appropriate. So the shareholders have no grounds for complaining since they are not only warned of this possibility, but have formally authorized it (and those who take positions haphazardly without considering what they buy can only blame themselves). However, this trade-off between speed / efficiency and taking into account all the shareholders is sometimes frustrating for those who see themselves mechanically diluted, when they would eventually have liked to be able to invest.
PrimaryBid’s offer makes it possible to reconcile these imperatives, by opening up private placements to all investors – without adding any complications for the company. British fintech is now landing in France, through partnerships with three of the market’s main brokers, Bourse Direct, Boursorama and Easybourse. Created in 2016, the firm has already upgraded its platform by intervening in 140 transactions, including a certain number of introductions (unlike France where at least 10% of the amount of introductory offers are typically reserved for individuals, some operations in the UK were simply not open to them until then).
For this, PrimaryBid has received approval from the ACPR (the Prudential Control and Resolution Authority of the Banque de France). The company has also signed a strategic partnership with Euronext, on the model of the one it forged with the LSE across the Channel.
The objective is therefore to democratize the capital markets through a digital platform that will connect investors to fundraising by listed companies under the same conditions as institutions. Concretely, when a listed company launches a private placement, which takes place outside of trading hours, the clients of partner brokers are informed that they can take part. PrimaryBid centralizes the orders (note that they are irrevocable, given the very short timeframe) and then supervises the settlement-delivery.
Surf the FDJ effect
“We are launching ourselves in France at a time when companies have a significant need for financing and when the French want to contribute directly to the economic recovery of the country after the Covid-19 crisis. Our primary ambition is to democratize the capital markets, by making them accessible to retail investors under the same conditions as institutional investors. We are delighted to work with Euronext and three major online brokers to achieve this. We are very enthusiastic about the reception given to PrimaryBid in France and look forward to working with leading companies to offer investment opportunities to individuals, “said Anand Sambasivan, CEO of PrimaryBid.
“We are delighted to contribute to the launch of the PrimaryBid service in France. We are convinced that the participation of individuals in the capital markets is beneficial to the entire financial system. The introduction of la Française des Jeux on Euronext Paris in November 2020 attracted a record participation of 500,000 individual investors, and led to a marked revival of individual interest in investing in equities. By allowing individuals to subscribe to capital increases of listed companies under the same conditions as investors institutions, PrimaryBid corrects a market flaw that effectively excluded this class of investors from certain transactions.The technological solution offered by PrimaryBid facilitates private individuals’ access to stock market investment, and thus effectively supports Euronext’s mission of enable the financing of the real economy through the markets “, added Anthony Attia, Global Head of Primary Markets and Post Trade by Euronext.
Guillaume Bayre – © 2021 BFM Bourse