Asset Match to offer Co-op Bank equity holders share lidiquity

Asset Match, the online marketplace to buy and sell shares in UK unquoted companies, announces today that it will be holding a share auction for Co-operative Bank equity investors.

The auction will be the first time shareholders and potential investors can buy and sell shares in transparent forum since the bank’s junior bondholders converted their assets from debt instruments into equity shares in late 2013. The auction will open on 10th September 2015 and will close at 4pm on 17th September 2015.

The Co-operative Bank currently has a large number of equity shareholders in nominee names with an aggregate interest of just under 80% of the company’s entire issued share capital. While much of the focus to date has been on Hedge Funds, there are many private investors held within those nominee accounts that are unable, or would find it extremely difficult, to realise their assets.

Iain Baillie, co-CEO of Asset Match, said: “We have been contacted by a number of private client shareholders asking us if we can assist and the fact that the Co-operative Bank’s shares are freely transferable and CREST enabled make an auction possible. With the Bank’s expected IPO currently on hold until its turnaround is further advanced, we are pleased that Asset Match will be able to provide a solution to shareholder liquidity while the bank remains private.”

How the Co-operative Bank share auction works

  1. Current shareholders and prospective investors will need to register on the Asset Match website.
  2. Once registered participants, through The Share Centre, will be able to place buy and sell limit orders when the auction opens on 10th September 2015. During the week long period of the auction buyers and sellers are able to monitor progress and are able adjust their bids and offers accordingly.
  3. At the close of the auction a non-discretionary algorithm determines the final auction price and the number of shares that will trade. The indicative closing price is visible throughout the auction.
  4. Subject to any demand or supply constraints, buyers with bids higher than or equal to the final price will be successful and sellers with offers lower than or equal to the final price will be successful.
  5. All successful buy and sell orders are transacted at the same price.

Providing shareholder liquidity is a common problem shared by many private companies. Asset Match aims to address this by giving companies and their investors an alternative liquidity strategy to a trade sale or IPO, or in the lead time to one of these ‘events’. The online trading platform hosts regular auctions on behalf of companies or at the request of their shareholders. Unquoted companies that have had their shares traded on Asset Match include the UK’s leading IFA wrap service company, Integrafin, and Scottish craft brewery, Brewdog.

“The auction process, and the algorithm that calculates the closing price, is a fantastic way to re-introduce some visible liquidity,” Iain Baillie continued. “By creating an ‘event’ we are bringing investors together so that they can buy and sell shares in a fair and transparent way. Without this auction it would very difficult for the Co-operative Bank’s.”

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