aaron goldstein head of russia and cis business development april 2008 benefits of listing on nyse...
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Aaron GoldsteinHead of Russia and CIS Business Development
April 2008
Benefits of Listing on NYSE Euronext
2
Asia
NYSE Cash Equities Fixed Income ETFs DRs
NYSE Arca
Cash Equities
Equity Options
ETFs
DRs
Euronext Cash Equities Bonds ETFs Certificates Warrants DRs
Alternext Cash Equities DRs
Liffe
Derivatives
Gateway to the Euro-zone
Americas Europe
Strategic RelationshipsNYSE Euronext
The world’s largest equity market
5% equity stake
Global Choice of Listing Venues & Products
Flexible Listing Venues Complement Capital Market Objectives
5% equity stake
3
NYSE Euronext – Global Exchange Leadership
Global Exchange• 1st Transatlantic Marketplace
• Largest exchange by market capitalization of listed companies: $30 trillion
• 80 of the 100 largest companies globally
• The world’s largest liquidity pool
• Daily trade in equity $142 billion(1/3 of the world’s trade)/Daily Derivative LIFFE Euro 1.8 trillion
• Listing venue of choice: over 4,000 listings from 55 countries
Global Source of Capital Raising
Premier Brand
Diversified Product Offering
Financial Strength• A listed company: $20bn market capitalization• AA rated
Investor Confidence - Sound Governance and Regulatory Framework
4
Value Proposition For Issuers
Listing Venue Choice• Multiple entry points for issuers of any size and geography• Listing options complement issuer’s strategy over time
Enhanced Liquidity • Access to $ and € – the world’s two leading currencies • Extended trading day• Product extensions (ETFs, Indices, Options, Futures…)• NYSE Euronext working towards fungible trading between US and Europe
Broad Investor Pool• Global and local investor access• Wide range of products (Equities, Bonds, ETFs, Derivatives…)• Investor outreach programs
Unique Global Visibility • Unparalleled Brand Association • Superior service offering• Superior peer alignment
Advocacy on Behalf of Issuers
5
Source: Dealogic, figures include closed-end funds
US and Europe: key regions for raising capital and home to the largest pools of financial assets
Source: McKinsey, January 2008
Total Financial Assets ($ tr)
Euro Zone
United Kingdom
Japan Emerging Asia
Other Western Europe
United States
Access to the World’s Largest Sources of Capital
Total Equity Capital Raised 2007
0
20
40
60
80
100
120
Europe UnitedStates
GreaterChina
Cap
ital
rais
ed
$ b
illi
on
0
100
200
300
400
500
600
Number of IPOs
6
Total Capital Raised through IPOs 2005-2007
* Hong Kong 2006 figures boosted by IPOs of China’s two largest banks; ICBC and Bank of China (raised combined total of $27.2 billion).
Source: Dealogic, exchanges; figures include closed-end funds (exclude ETFs)
NYSE Euronext: The Center for Global IPOs
Source: Dealogic
Median IPO size
0
50
100
150
200
250
NYSEEuronext
London SE(incl AIM)
NASDAQ Hong Kong
$ m
illio
n
NYSE Euronext: 307 New Listings in 2007 Large median IPO size in 2007, but wide range ($ 6.4 mln to $ 6 bln)
5962
28
40
45
25
1814
81
6968
21
0
10
20
30
40
50
60
70
80
2007 2006 2005
IP
O $
Rai
sed
($
bil
lio
n)
NYSE London Hong Kong NasdaqEuronext
2823
14
7
NYSE Euronext: The Center for Secondary Offerings
NYSE Euronext is the dominant stock exchange for follow-on financing
Euronext has raised more capital through secondary offerings than London SE, Deutsche Boerse and Nasdaq over the past 3 years
Source: Dealogic * single counted
Follow-on capital raised (2005-2007)
-
20
40
60
80
100
120
140
160
180
NYSEEuronext
(combined*)
NYSE Euronext(incl
Alternext)
London SE(incl AIM)
Nasdaq DeutscheBoerse
Hong Kong
$ bi
llion
2005 2006 2007
8
NYSE Euronext: Largest BRIC+K (Kazakhstan) Footprint
Market capitalisation & number of BRICs companies (end 2007)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
NYSEEuronext
London SE Nasdaq
mar
ket
cap
$ m
illio
n
0
20
40
60
80
100
120
No. of companies
NYSE Euronext has attracted more international listings from emerging economies than any other stock exchange
Average daily value traded by BRICs companies (FY 2007)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
NYSEEuronext
London SE Nasdaq
$ m
illio
n
Source: Bloomberg, NYSE Euronext
9
Superior Service Offering for Issuers
Media support & Press Release Service
NYSE Euronext dedicated website for issuers
Quarterly web-casting
Magazine coverage
Advertising
Retail and institutional investor targeting programs
Inclusion in market indices
Event support: full access to NYSE Euronext facilities for investor, board meetings and product launches
Visibility
Education
CEO Leadership forum
IR, CEO, Governance forums
Investor education via NYSE Euronext websites
Information Tools
Issuer publications/newsletters
Web-based market data resource
eGovDirect
Dedicated Customer Service
Liquidity provision
Client service manager
Governance specialist
Comprehensive Issuer Support Pre and Post Listing
NYSE Euronext European Platform
11
Euronext – key features
One single cross-border trading platform• Integrated across four countries• Former stock exchanges of Paris, Amsterdam, Brussels and Lisbon
Global footprint• NYSE Euronext is the world’s first truly global marketplace
Listed instruments• Shares• Corporate bonds• Depositary Receipts (GDR, ADR, EDR)• Derivative instruments, including Convertibles, Options, Warrants and Futures
Currency of listing• Euro - the world’s second most important currency• Or any other major currency
Indices• CAC 40, AEX 25, Euronext 100, FTSEurofirst…
12
Euronext’s Competitive Position in Europe
MARKET CAPITALISATION
European cash equity market capitalisation
(end 2007)
TRADING VOLUMES(2007)
Source: Federation of European Securities Exchanges (FESE) Figures include domestic & primary international listings
• Largest equity market in Europe
• Largest trading platform in Europe
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Euronext LondonStock
Exchange
DeutscheBörse
SpanishExchanges
BorsaItaliana
OMX SWXGroup
Val
ue tr
aded
€ b
ilion
0
20
40
60
80
100
120
140
160
180
Mill
ion
trade
s
Turnover Trades
Euronext27%
London Stock Exchange
25%
Deutsche Börse 14%
Spanish Exchanges 11%
SWX 8%
OMX 8%
Borsa Italiana7%
13
Sector Comparison Euronext vs LSE
•Euronext sector profile very similar to London Stock Exchange
•Euronext – larger in Technology, Consumer Goods, Utilities, Industrials
Total market cap = €2,982 billion Total market cap = €2,769 billion
Source: Bloomberg, Euronext & LSE data as December 2007. ICB classification, domestic & primary listings, includes main market, SME market, equity investment instruments.
Euronext
5%
9%
24%
4%
15%
4%Technology3%
Utilities10%
Consumer Goods14%
Industrials12%
Basic Materials
Consumer Goods
Consumer Services
Financials
Health Care
Industrials
Oil & Gas
Technology
Telecommunications
Utilities
London Stock Exchange
Basic Materials 12%
Oil & Gas 16%
10%
11%
Financials 26%
6%
7%
6% 1%
4%
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Unique access to European asset managersEuro-zone countries dominate investment fund industry in Europe - 82% of total
Assets under management increased 9% in H1 2007 taking total to € 6.4 trillion (UCITS)
NYSE Euronext’s European platform facilitates cross-border access
Source: European Fund & Asset Management Association (EFAMA) end H1 2007
Assets Under Management
UCITS – Undertakings for the Collective Investment of Transferable Securities
- 500 1,000 1,500 2,000
Turkey
Switzerland
Sweden
Slovakia
Poland
Norway
Liechtenstein
Hungary
Denmark
Czech Republic
United Kingdom
Spain
Luxembourg
Italy
Ireland
Greece
Germany
Finland
Austria
Portugal
Netherlands
France
Belgium
European investment fund assets
United Kingdom11%
Euro-zone (ex Euronext)
56%
Euronext countries
26%
Other Europe7%
Global investment fund assets
Americas53%
Europe35%
Asia & Pacif ic12%
Africa0.4%
EUR billion
15
Euronext is dominated by high quality broker-dealers & listing agents
• Bulge bracket and pan-European banks dominate the marketplace
• Euronext gives access to the Euro-zone…as well as US & UK based investors: all major London based investment banks are active members
• Over 50% of trading by London based broker-dealers
Top 25 broker-dealers and listing agents
16
Euronext IPOs have consistently outperformed other European
exchanges over the past 3 years
Source: Dealogic December 2007
Figures include main markets and SME markets
IPO price performance 2005-2007
-15
-10
-5
0
5
10
15
20
25
NYSE Euronext(European platform)
London SE (incl AIM) Deutsche Boerse
%
Average % Change Price Offer/Current
Median % Change Price Offer/Current
IPO size profile 2005-2007
-
50
100
150
200
250
300
350
NYSE Euronext(European platform)
London SE (inclAIM)
Deutsche Boerse
USD $
Average deal size Median deal size
m
17
EuronextEU regulated main market for large, mid & small caps
* Minimum 25% shares distributed to the public * Three-year track record required (exemption for funds)* IFRS, US GAAP or recognised accounting standards
Ongoing obligations* Audited FY and audited/un-audited half-year accounts* Timely disclosure
* Two-year track record (exemption for funds) * IFRS, US GAAP or local GAAP with reconciliation table
Ongoing obligations less demanding* Audited FY accounts, un-audited half-year reports * Simplified reporting methods * Timely disclosure
AlternextExchange-regulated market for mid & small sized companies
Listing Requirements – Overview
18
Listing requirements comparison: Euronext vs London SE
Euronext* London – Main Market
GDR listings Primary listing on main market orderbook
Eligible for inclusion in main indices
Secondary listing on IOB
Excluded from main indices
Primary listing requirements
Corporate governance – majority of board required to be independent
Not mandatory Yes – UK Combined Code
Shareholder approval required for:
• Substantial transactions
• Related party transactions
No
No
Yes
Yes
Non-voting shares permitted Yes No
Primary listing requirements for investment companies/funds
Investment restrictions None 10% maximum in other listed entities
(unless listed entity has 15% investment concentration limit)
Feeder funds required to control master fund investment policy
No Yes
* Euronext Amsterdam entry point
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Euronext* London – Main Market
Primary listing requirements for investment companies/funds (continued)
Requirement for spread of investment risk No Yes
Requirement for investment manager track record No Yes
Annual explanation on benefit of continued appointment of manager No Yes
Quarterly portfolio reports No Yes
Future issues of shares only above NAV No Yes
Restrictions on share buybacks No (though market abuse directive applies) Yes, limited to 14.99%
Electronic flagging of restricted securities in settlement system Yes No – physical delivery
Listing requirements comparison: Euronext vs London SE
* Euronext Amsterdam entry point
Euronext – TheMain Board
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Euronext – The Main Board
One cross-border EU regulated market – one rule book
• Choice of regulatory entry point to cross-border platform
Borderless
• Companies are classified according to sector and market capitalization rather than
geographical location
Equal opportunity for international companies to join key indices
Companies from over 30 countries listed
Sound regulatory framework (but no Sarbanes Oxley!)
22
Top 10 Euronext IPOs 2007
Company Nationality SectorCapital raised
(EUR)Market cap
(EUR)
Nyrstar BEL/AUS Non ferrous Metals 2,000 2,000
Conversus Capital GGY Equity Investment Instruments 1,314 1,314
Bureau Veritas FRA Business Support Services 1,078 4,378
Rexel FRA Industrial Suppliers 1,056 4,224
Lehman Brothers Private Equity GGY Equity Investment Instruments 363 363
REN PRT Electricity 324 1,469
AMG Advanced Metallurgical Group NLD Non ferrous Metals 314 643
Arseus NLD/BEL Medical Supplies 302 320
Leo Capital Growth SPC CYM Equity Investment Instruments 261 261
Paris Re CHF Reinsurance 225 1,656
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Legal Marketing
Due diligence
Required financial statements
Positioning
Valuation
Deal structure
Prepare prospectus
Apply for listing & regulatory approval
(through listing agent)
Analyst meeting
Presentation material and Q & A practice
Pre-marketing to institutionsEuronext
Listing admission
Regulator
Prospectus
Book building
Road show and marketing to investors
Appoint listing agent / Lead manager
Price fixing
Allocation
Trading
T– 30 to 90 days
T– 14 days
T– 3 to 6 months
Euronext Listing and IPO process
Euronext involvement
List on Euronext
Start trading
NYSE Alternext:
the SME Market
25
Alternext – The SME Market
Why Alternext?
• More than 1m €uro-zone SMEs eligible…
…but substantially fewer than 1% listed!
Alternext is an exchange-regulated market;
• Designed for small and mid sized companies
• Simplified listing rules and ongoing obligations
• Open for companies from all sectors and countries
• Launched mid-2005
• Broad €uro-zone access
• Same 4-country trading platform for Euronext and Alternext
26
Alternext – Key Listing Requirements
2 year company track record (exemption for funds)
IFRS or US GAAP
• Audited FY accounts, un-audited 6 months report
Choice of Market Access:
• Fast track dual listing through recognised market status• Access via offering circular for companies listed on another market
Use of Listing Sponsor mandatory
Public offeringAccess to retail and/or qualified investors
Private placementAccess to qualified investors only
Minimum free float: € 2.5m Minimum placing: € 5m
Prospectus cleared by regulatorEU Prospectus Directive
Offering circularNot cleared by regulator; disclosures under responsibility of the Listing
Sponsor & Issuer
27
Alternext – sector breakdown*
Alternext has achieved its target as a broad marketplace for SMEs
* Market capitalisation, December 2007 - ICB (Industry Classification Benchmark)
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0%
Technology
Financials
Utilities
Telecommunications
Consumer Services
Health
Consumer Goods
Other Industrials
Business Services
Electronics
Construction
Basic Materials
Oil & Gas
28
Alternext – size profile
Alternext’s target company size of €20m - €250m achieved.
No micro-caps… …better liquidity
Distribution of companies by market capitalisation
Alternext
0%
5%
10%
15%
20%
25%
30%
35%
0 - 2 2 - 5 5 - 10 10 - 25 25 - 50 50 - 100 100 - 250 250 - 500 500+
€ m
Distribution of companies by market capitalisation
AIM
0%
5%
10%
15%
20%
25%
0 - 2 2 - 5 5 - 10 10 - 25 25 - 50 50 - 100 100 - 250 250 - 500 500+
€ m
Source: Euronext, LSE, December 2007
29
Alternext – key indicators
Number listed companies 120
Total market capitalisation € 5 billion
Average deal size € 9.4m
Deal size range € 2.6m to € 34m
Sector breakdown** All sectors represented
Alternext AIM
Trading modelHybrid: option of orderbook or
market makerMainly market maker dependent
Average market cap € 42m € 72m
Median market cap € 32m € 26m
Key indicators (Feb 2008)
P/E ratio (median) 18.2 12.8
Bid-ask spread ratio (median) 3% 7%
Volatility – 360 day (mean) 42.5% 50%
Stocks with Analyst recommendations 48% 42%
Source: Euronext, LSE & Bloomberg * end January 2008 ** ICB - Industry Classification Benchmark
Alternext today*
Alternext vs. AIM
Average number of trades per stock - FY 2007
-
1,000
2,000
3,000
4,000
5,000
6,000
Alternext AIM
Spread ratio = bid–ask spread / last price £= € 1.34 Volatility = annualized standard deviation of the relative price change for the 360 most recent trading days closing price
30
Alternext: IPOs and Investor Base
IPOs:
• 80% institutional investor participation, underpinning valuations
Investors:
• Institutions from 14 countries
• Broad continental European institutional take-up
• Strong US-UK acceptance
Origin of institutions(as of October 2007)
Euronext zone58%
U.S.2%
Canada1%
Denmark2%
Germany9%
Austria1%
Australia1%
Luxembourg5%
Sweden2%
Switzerland4%
Spain2%
U.K.13%
Alternext: Truly Pan-European
Source: Lionshares
31
Alternext - Listing Sponsors
Use of a Listing Sponsor is mandatory
Two main roles as the listed company's long-term partner:
• Support the company in preparing for listing
• Ensures company fulfils ongoing obligations
No fees to be Listing Sponsor
Requirements to become a Listing Sponsor:
• 2 years relevant experience
• Liability insurance
• Fill in application form
Over 60 Listing Sponsors registered…and counting
32
Alternext Listing Sponsors
Crédit du nord
CM-CIC Securities
Close Brothers
Clipperton Finance
CIC Banque CIO
CFD Corporate Finance
Cassagne Goirand et associés
Bryan, Garnier & Co
Banque Privée Fideuram Wargny
Banque Palatine
Banque Degroof
Avenir Finance Corporate
Aurel Leven Securities
Atout Capital
Arkéon Finance
Amsterdams Effectenkantoor
Allegra Finance
Aélios Finance
Kepler Equities
Kempen & co
KBC Securities
IXIS Midcaps
Invest Securities
Intuitu Capital
ING Belgium
ING Bank NV
IBI
H & Associés
Grant Thornton
Global Equities
Fortis
First Dutch Capital
Fideuram Wargny
Exco
Euroland Finance
EFI
Vizille Capital Finance
Teather & Greenwood
Sodica
Société Générale
SNS Securities
Résalliance & Associés
Rabobank
Portzamparc Société de Bourse
Petercam
OTC Securities
Oddo Corporate Finance
NIBC
Nextcap
Nexfinance
Natexis Bleichroeder
L'Lione & Associés
KPMG Corporate Finance
Leleux Associated Brokers
Contact details: www.alternext.com
PricewaterhouseCoopers
Atlantic Law Llp
33
Features: KKR Private Equity Investors is a Guernsey limited partnership investment
vehicle created by KKR (Kohlberg Kravis Roberts), the US private equity firm.
- Listed closed-end fund
- 75% assets invested in KKR funds / 25% in opportunistic investments
- KKR has a 30 year track record of superior investment returns
IPO date – 3rd May 2006:
Funds raised: $5 billion
Raised over 3 times original target
Offer price: $25.00 (approx. NAV)
Joint global coordinators and bookrunners: Morgan Stanley, Citigroup, Goldman Sachs
(1/2)
34
Reasons KKR selected Euronext as its listing venue:
“Euronext gives global investment focus and global investor base”
No restrictions on investment in a single project
Limited partnerships can list on Euronext Amsterdam
Flexible corporate governance code
High net worth individuals
15%
Mutual funds55%
Long-orientated hedge funds
30%
US71%
Europe/Asia29%
Broad take-up by style and geography:
(2/2)
35
Activity:
Prologis European Properties (PEP) is an externally managed real estate investment
fund. Portfolio consists of 281 high quality distribution facilities comprising 5.4 million
sq metres of leasable space in 11 countries, valued at € 4.2 billion as of June 2006.
Deal size (22 Sept 06):
Valuation: € 2.7 bn
Offer price: € 14.35 (12% premium to
30-Jun-06 NAV)
Funds raised: € 715m (incl. € 65m
greenshoe)
Free float: 29.5%
Deutsche Bank and Morgan Stanley – joint global co-ordinators and bookrunners.
Largest European real estate IPO 2006 & 2nd largest European real estate IPO ever.
(1/2)
36
Europe74%
US22%
Australia4%
• Index inclusion: AEX Real Estate, AEX Financials
Broad take-up by geography:
“The deal attracted long-only specialist real estate investors from all around the world…”
IFR, 23 September 2006
Reasons for choosing Euronext:
Assets & continuing growth in the Euro-zone
Only major exchange to accept ‘Fonds Commun de Placement’ (FCP) structure
(2/2)
37
Why the NYSE Euronext European platform?
Gateway to the €uro-zone + Global Visibility
• Publicity: cross-border access to investors, customers & business partners• Acquisition currency: €uro – a key currency• Huge pool of assets under management• Single entry point gives broad European access for listing and trading
Leading cross-border exchange with a pan-European reach
• Top-ranked globally for capital raising• Largest central orderbook trading volumes in Europe• Largest exchange in Europe by market capitalisation• Broad service offering for early stage and mature companies