JERSEY Law and Practice Contributed by: Paul Burton and David Allen, Maples Group
10.3 IPO The appetite for IPO exits by private equity sponsors will be dictated by equity capital market conditions.. In a successful IPO exit, a private equity sponsor (as selling shareholder) will be “locked up” for up to six months, with management locked up for a somewhat longer time (eg, 12 months). Relationship agreements covering lock-up and other management and transi - tional matters are generally entered into between the private equity sponsor seller and the listed company.
Trade sale exits are also becoming more common and demonstrative of the level of consolidation that has occurred in the financial and corporate services sec -
tors in the Jersey M&A market. 10.2 Drag and Tag Rights
Drag-along rights (ie, the right of a private equity spon - sor to force other shareholders, including manage - ment, to sell their shares in a portfolio company) are usual in the equity capital structuring arrangements for private equity-sponsored transactions. There are no typical drag-along or tag-along thresholds in Jersey. It is rare for drag-along rights to be exercised; however, where there is a large number of non-institutional sell - ers (eg, management shareholders), a drag provision might be relied upon for administrative convenience and to avoid the need to convene a large number of parties to a sale and purchase agreement.
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