236 5 Equity and Shareholders’ Capital
First, the board of directors decided: to arrange an offering of up to 8,000,000
new shares in Ahlstrom Corporation to Finnish and international institutional
investors (the institutional offering), and to retail investors in Finland (the retail
offering); to withdraw existing shareholders pre-emption rights; that the initial
offer price range was €20.00–24.00 per share; that the board would make the final
decision on the number of shares to be offered for subscription and the offer price
after the marketing period in the Institutional Offering had ended; on the detailed
terms of the IPO; that Ahlstrom would apply for the shares to be listed on the main
list of the Helsinki Stock Exchange; to grant SEB Enskilda, acting on behalf of the
managers, an over-allotment option; and to authorise SEB Enskilda to take
stabilisation measures.
Second, the board of directors of Ahlstrom Corporation decided: that Ahlstrom
would issue a total of 8,000,000 of its shares in its IPO; that both the institutional
offering and the retail offering would be priced at €22.00 per share; that 6,600,000
shares would be allocated to institutional investors and 1,400,000 shares to retail
investors; and on the allocation of shares allotted by the company between
subscribers.
The allocation of shares created some problems, because the IPO was heavily
oversubscribed. A holding company owned by the controlling family was granted
the right to maintain its proportional shareholding in the company, assuming that
SEB Enskilda exercised the over-allotment option in full. In the retail offering,
subscription commitments were fully accepted up to 50 shares. For commitments
exceeding 50 shares, investors in the retail offering were additionally allocated
approximately 18% of the amount exceeding 50 shares. Allocations exceeding 50
shares were rounded to the nearest round lot. Excess payments made in connection
with the subscription commitments were returned to investors.
Third, the board decided to file the increase in share capital with the trade
register.^498
Fourth, after SEB Enskilda exercised the over-allotment option to subscribe for
1,150,000 additional shares of Ahlstrom Corporation to cover over-allotments in
the institutional tranche of the offering, the board of directors decided to allot
those shares.
Fifth, the board again decided to file the increase in share capital with the trade
register.
5.11 Shares as a Means of Payment.............................................................
5.11.1 Introduction
Companies can have many reasons for not turning to existing shareholders for
fresh capital. For example, a rights issue tends to reduce a listed company’s share
(^498) Article 3 of Directive 68/151/EEC (First Company Law Directive) and Article 3 of Di-
rective 77/91/EEC (Second Company Law Directive).