(BFM Bourse) – Since the beginning of the year, the number of companies going public has been very modest. To boost the rating, which is increasingly reduced, direct listing on Euronext Access can be a support factor for the emergence of new companies on the Paris market.
The IPO market experienced a real setback in 2022, due to an unfavorable stock market environment and an adverse geopolitical context. And the trend does not seem to be reversing in the first months of 2023. Only the online driving learning specialist Lepermislibre had the honor of marking the very first listing on the Paris Stock Exchange this year.
Since this operation, no small and medium-sized French company has expressed the wish to go public on Euronext Growth, the compartment dedicated to this type of company. On the other hand, several small French companies could, according to a note published recently by the EuroLand Corporate research office, enter the Euronext Access compartment, the least restrictive of the Euronext galaxy.
Euronext Access is aimed at start-ups and SMEs “seeking to benefit from the advantages of an IPO to finance their growth and gain notoriety, but which do not meet the criteria for admission to the Euronext or Euronext Growth markets. “, explains Euronext. “The constraints applicable to companies admitted to this market have been deliberately limited in order to allow these companies to focus primarily on the development of their activities”, adds the pan-European Stock Exchange.
Direct listing: a unique method of IPO
The company EuroLand Corporate claims to be more and more “solicited” to support start-ups or SMEs in a direct listing operation. This mode of listing or technical admission consists of listing the shares of a company without raising capital on the occasion of this listing on the Euronext Access compartment. It should not be confused with a private placement.
In the case of a direct listing, there is no capital increase, nor even a sale by the historical shareholders of shares prior to the company’s IPO, therefore no public offer. . This simplicity of the operation exempts the company from publishing a prospectus approved by the Autorité des marchés financiers.
So how is it possible to acquire shares of the company under these conditions? “It is only possible to acquire securities at the time of the first listing of the shares in the context of the confrontation between supply and demand on the market, the securities being made available by one or more former shareholders of the company” explains Thomas Hornus, partner at EuroLand Corporate. “It is therefore the only market that will make the reality of the price of the title!”, He adds.
The benefits of a direct quote
For a company of modest size, the direct listing on Euronext Access is a simple and quick way to enter the stock market compared to other existing methods. In addition to notoriety, and this speed of the process, such a method of listing allows, according to EuroLand Corporate, to set up potential tools for effective profit sharing of employees such as employee shareholding plans allowing them to be associated with the life of their business.
“You have to take the initial public offering by direct listing on Euronext Access for what it is”, recalls Thomas Hornus, who adds that it offers “its shareholders liquidity, even modest, that they would not have been able to obtain elsewhere”.
The specialist wants to temper the advantages that a company can derive from a direct listing on Euronext Access. “It will not bring listed companies all the benefits of a regulated market or even Euronext Growth, as some institutional investors cannot act on the latter,” explains Thomas Hornus. On the other hand, if this listing on Euronext Access is used “wisely”, it can constitute, according to the specialist, “a formidable learning tool and gradual acclimatization to the market”.
This mode of quotation is also highly appreciated by foreign companies. In November 2022, the Greek company specializing in the hotel industry, The Azur Selection went public via a listing by direct admission on Euronext Access+, which could be considered as the antechamber of Euronext Growth. For the Greek company, the Stock Exchange has been identified as a means of “supporting an ambitious short-term expansion policy”.
The Azur Selection considers this listing on Euronext Access + as a stage of acclimatization to the financial markets before a transfer to the upper compartment. Its founder did not hide it “this admission marks the first stage of the future transfer of the company’s securities to the Euronext Growth Paris segment”, he declared when the project was announced. direct listing on Euronext Access+.
Other companies have already taken the plunge, such as Kumulus Vape. From its IPO in 2019 on Euronext Access, the distributor of electronic cigarettes wanted to communicate regularly with its shareholders by adopting a rhythm of periodic publications more sustained than required by its market at the time. Since May 2021, the company Kumulus Vape has gone on Euronext Growth with already the experience of good practices in financial communication.
Sabrina Sadgui – ©2023 BFM Bourse
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