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Spain will provide businesses with much more flexibility than when they could launch their first public offerings to prevent political shocks, wars, or market sales from getting their lists stuck in the final moments.
Spanish companies now have five days for the stock to start trading after it has completed its listing preparation and regulatory approval. However, market regulators and BMEs, which own Spanish stock exchanges, are planning to extend that period to 18 months so that they can choose the “best” moment.
The move follows a 11-hour IPO cancellation patch that has damaged the market’s reputation. It’s also because many companies have chosen to move or launch listings to IPOs in New York, and then Europe is looking at how its floating makes the market more attractive.
Carlos San Bacilio, chairman of the CNMV market regulator, who presented the plan, said half of the companies that approached the regulators over the past five years on public transport, at one point, had abandoned the plan.
The decision to change the rules is to “end this and provide an alternative,” he said.
Europe, which makes frozen croissants, canceled its flotation twice last year, citing the turbulence of the market in June, linking it to French parliamentary elections and the “international geopolitical situation” in October.
Fashion retailer Tendam postponed the IPO twice in the same two months, citing uncertainty over the outcome of the second US presidential election.
The two companies remain private, but recent private transactions have changed ownership. A large group in Abu Dhabi bought 68% of Tendam, and Europe sold 20% of its shares to Criteriacaixa, part of the Banking Foundation.
“There is an urgent need for measures to reverse, or at least halt, the loss of economic influence and competitiveness of the Old Continent,” says Juan Flames, CEO of BME, referring to Europe as a whole.
To avoid repeated cancellations, a new process called BME Easy Access will allow you to choose timing “in a short time” within 18 months, CNMV said.
“This way, the IPO process is separated from the market’s macroeconomic and liquidity situations, which can support the company’s plans and irritate the IPOs,” the regulator said.
The new approach that regulators want to finalize before summer works by loosening the minimum free float requirements that listed companies have.
The listing process will officially be made available to businesses with a valuation of at least 500 million euros, but CNMV says it will consider applications from small businesses.
The regulator added that it is consistent with measures envisaged in the Block Listing Act to stimulate the open market.
