Share placings: placing, accelerated bookbuild, cashbox and open offer

A placing is an issue of new shares to selected institutional investors rather than to shareholders pro rata. In the United Kingdom it is usually executed in hours through an accelerated bookbuild, under authorities the shareholders granted in advance. The FCA Handbook defines it as a marketing that does not involve an offer to the public.

Key takeaways

• Two authorities, not one. A placing consumes the section 551 allotment authority and a section 570 disapplication.
• Headroom decides feasibility. The Pre-Emption Group's template resolutions ask for ten per cent of issued share capital, plus ten for an acquisition.
• Cashbox is a pre-emption device. Paying the issuer in subsidiary shares makes the allotment non-cash, and section 565 switches section 561 off.
• The discount cap is a listing rule. UKLR 9.4.13R(1) keeps the price within 10% of the middle market price.
• Dealings follow admission. Until admission is effective and the stock settles, a placee holds a conditional contract.

What a placing is

The FCA Handbook defines a placing, for listing-rule purposes, as “a marketing of securities already in issue but not listed or not yet in issue, to specified persons or clients of the sponsor or any securities house assisting in the placing, which does not involve an offer to the public or to existing holders of the issuer's securities generally”. The bank decides who is shown the stock.

So the trade can be priced and announced inside an evening, and existing holders are diluted without being asked. One floor applies: under section 580 shares must not be allotted at a discount to nominal value.

The two authorities a placing consumes

Directors cannot allot without authority. Section 551 requires authorisation by the articles or by resolution, stating a maximum amount and an expiry within five years. Section 561(1) requires equity securities to be offered first to existing ordinary shareholders in as nearly as practicable the proportion they hold, and section 562(5) gives them at least 14 days to accept.

Section 570 lets a special resolution disapply that right where the directors hold a general authority, so pre-emption rights are switched off in advance at the annual general meeting. The Pre-Emption Group's template resolutions ask for up to ten per cent of issued share capital, plus ten per cent for an acquisition or other capital investment the board identifies. A raise above that headroom needs a general meeting, which turns an overnight trade into a process measured in weeks.

The accelerated bookbuild

An accelerated bookbuild is the execution method, not a different instrument. The bank opens a book after the close or intraday, institutions bid for size at a price or a limit, and it is priced and allocated within hours.

Two market-abuse provisions govern the hours before launch. Where shareholders are sounded first, Article 11 of the UK Market Abuse Regulation requires the disclosing participant to record whether inside information will be disclosed, obtain consent to receive it, prohibit dealing and amendment of orders, and keep records for the FCA. Article 17(1) requires inside information to be disclosed as soon as possible, with delay only on the three conditions in Article 17(4).

The cashbox

A cashbox is used when there is not enough headroom. Section 565 is the whole of the device — the right in section 561(1) “does not apply to a particular allotment of equity securities if these are, or are to be, wholly or partly paid up otherwise than in cash”. Partly is enough.

A newly formed company, conventionally in Jersey, issues redeemable preference shares; the bank subscribes with the placing proceeds; the issuer allots its own shares for the transfer of those preference shares rather than for cash, then takes the cash out of the subsidiary. Section 583 decides when shares count as paid up in cash. Section 593 bars a public company from allotting shares paid up otherwise than in cash unless the consideration has been independently valued; section 594 lifts that only where the consideration is shares in another company and the arrangement is open to all holders of that class.

A cashbox removes the right to be offered the stock first. It does not lift the cap, or reduce dilution.

The 10% discount limit

Under UKLR 9.4.13R(1), where a listed company makes an open offer, placing, vendor consideration placing, offer for subscription of equity shares or issue out of treasury of a class already listed, “the price must not be at a discount of more than 10% to the middle market price” — measured when the placing is agreed, or when the terms are announced for an open offer.

Paragraph (4) excuses that where shareholders specifically approve the terms at the deeper discount, or where the issue is of shares for cash, or treasury shares for cash, under a pre-existing general authority to disapply section 561 — which a cashbox allotment, being non-cash, is not. Paragraphs (5) and (6) require notification to a regulatory information service once terms are agreed, with the discount stated.

UKLR 9 applies only to a listing of equity shares in the equity shares (commercial companies) category. A rights issue is not in the list at all.

Placing and open offer, and retail tranches

A placing and open offer couples an institutional placing with a pro rata invitation to every shareholder, the placing clawed back to the extent entitlements are taken up. The offer must stay open at least 10 business days (UKLR 9.4.8R), as a rights issue must (UKLR 9.4.6R), and entitlements are not renounceable, so there is no nil-paid market — except in a compensatory open offer, where UKLR 9.4.10R sends any premium to the holders.

A retail tranche answers the same objection, running beside the book through an intermediaries platform. The constraint is the prohibition on public offers in regulation 12 of the Public Offers and Admissions to Trading Regulations 2024, and the retail leg is built to sit inside one of the exceptions in Part 1 of Schedule 1: an offer made solely to qualified investors, an offer to existing holders of shares, or an offer made by means of a regulated platform.

Prospectus, settlement and dealing

Admission to a UK regulated market engages the prospectus requirement in PRM 1.4.1R. PRM 1.4.3R exempts transferable securities fungible with transferable securities already admitted to trading on the same regulated market, provided they represent, over a 12-month period, less than 75% of the number already admitted. That 75% is the figure for an issuer other than a closed-ended investment fund; the sourcebook took effect on 19 January 2026.

Pricing is not the moment the stock becomes tradeable. An application for admission to listing of a class must cover all securities of that class, issued or to be issued (UKLR 3.2.1AR), and admission becomes effective once the decision is disseminated by a regulatory information service (UKLR 20.2.7G). The United Kingdom has required most trades to settle by T+2 since 2014, and the government has committed to mandate T+1 from 11 October 2027. There is no UK equivalent of the Rule 144 holding period: once admitted and settled, placed shares are ordinary shares of the class.

Primary sources

• Companies Act 2006: s.551, s.561, s.562, s.565, s.570
• Companies Act 2006: s.580, s.583, s.593, s.594
• FCA Handbook, UKLR 9.4
• UKLR 3.2, UKLR 20.2, UKLR 9.1
• FCA glossary: placing, open offer
• Prospectus Rules, PRM 1.4
• Public Offers and Admissions to Trading Regulations 2024: reg. 12, Schedule 1
• UK Market Abuse Regulation, Article 11, Article 17
• Pre-Emption Group template resolutions
• HM Treasury: mandating T+1

Related reading

• Free-trading shares
• Registered direct
• Instruments
• Glossary

Share placings: frequently asked questions

What is a placing of shares?

An issue of new shares to investors the bank selects, rather than an offer to existing shareholders pro rata. On the FCA Handbook definition it does not involve an offer to the public.

What is an accelerated bookbuild?

The execution method for a placing, not a separate instrument. A bank opens a book, usually after the close, institutions bid for size, and the book is priced and allocated within hours.

What is a cash box placing?

A placing in which the issuer is paid in shares rather than cash. A newly formed company, conventionally in Jersey, issues redeemable preference shares the bank subscribes for with the proceeds, and the issuer takes those shares as consideration. Section 565 of the Companies Act 2006 then displaces pre-emption.

Can a placing be priced at more than a 10% discount?

Only within UKLR 9.4.13R(4): shareholders specifically approve the terms at that discount, or the issue is of shares for cash under a pre-existing general authority to disapply section 561.

What is the difference between a placing and an open offer?

A placing goes to selected institutions. An open offer invites every shareholder pro rata and must stay open at least 10 business days, but the entitlement is not renounceable.