This event as opposed to the Initial Public Offering, is another offering of shares to the public. The company can have multiple further public offerings in its lifetime.
This event is usually declared as a capital increase through issue of shares.
Critical fields in a Further Public Offering
The main details involved here are as follows:
- Number of shares to be issued
- Issue price: which is fixed as opposed to the Initial Public offering
- Offering period: which is the period in which these shares are offered to the public. You could have the primary period as well as the extension period (Secondary period). In the extension period you can have the shares not sold in the primary period
- Over-allotment option (Extension clause): Which is an extension pack of shares offered to the public in case there is big demand for the company’s shares in the primary period
Listing of the new shares
The new shares issued as a result of the Further public offering, will be listed in a date defined by the Stock Exchange, which we call the “Listing date”. Prior to that date we have the “Settlement-Delivery” date, which is the date where the ownership of the new shares is registered in the company’s books, as well as in the Depository Clearing. As of that date you are officially holder of the shares.
Here is a simple diagram describing what is happening:
What you should know is that the new shares may join the previously issued and listed shares or they can be listed in another compartment using a different ISIN code (Security identifier worldwide).
When they join the old shares we say: The new shares are directly assimilated to the old shares.
You can checkout the main post for the assimilation event.