DENMARK Law and Practice Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
3. Initial Public Offering (IPO) as a Liquidity Event 3.1 IPO v Sale The Danish IPO market is less active than, eg, Swe- den and is often a more viable exit route for mature companies with a proven business model rather than scale-ups and similar less mature companies. Inves- tors are more likely to run a sales process when pur- suing a liquidity/exit event rather than an IPO. Thus, most exit processes are primarily structured as a sale process from the outset. Although an IPO may also be pursued in a classic exit scenario, IPOs and listings are generally consid- ered more viable options for companies with expect- ed future funding requirements being better served through access to the equity capital markets rather than by private equity or debt capital. However, even for better-suited IPO candidates, it is customary to arrange for a dual-track process at the outset where a sale to a long-term investor is sought in parallel with an IPO. Accordingly, save for certain IPO candidates owing to their ownership structure (eg, foundation ownership requiring the foundation to maintain a certain degree of influence), the general trend for IPO candidates – albeit not in all liquidity/exit events involving any type of company – is to have a dual-track process. 3.2 Choice of Listing IPOs and listings of Danish companies are most likely to be made in Denmark, with listing on the regulated market of Nasdaq Copenhagen as the preferred ini- tial exchange (the other being the multilateral trading facility, Nasdaq First North Growth Market Denmark). The familiarity of the regulatory regime and only hav- ing to deal with one set of stock exchange rules is generally preferable for an initial listing to reduce com- plexity and administrative burdens. The Danish equity capital market has generally been sufficient to meet company demands for capital both in IPOs and sec- ondary issuances, as well as in high-volume transac- tions, and the years 2024 and 2025 have seen very significant secondary equity issues in the Danish ECM space with strong investor support.
Historically, some Danish companies have pursued their initial listing on the Swedish Nasdaq Stockholm exchange. Growth companies, in particular, have pur- sued listing on the First North Stockholm multilateral trading facility (non-regulated market) maintained by Nasdaq Stockholm, which is generally perceived as being more liquid than the corresponding Nasdaq First North Growth Market Denmark exchange. How- ever, this trend has been reversed somewhat in recent years, with some Danish companies originally listed on another Nordic exchange pursuing a dual-listing on Nasdaq Copenhagen to better connect with Dan- ish investors. IPOs and initial listings are rarely pursued in two jurisdictions at once, owing to the complex nature of running a dual initial listing process as well as the additional compliance/disclosure regime. Larger already-listed companies may, and do sometimes, pursue a secondary listing of shares or depositary receipts (ie, American Depositary Receipts or similar) on a foreign exchange. 3.3 Impact of the Choice of Listing on Future M&A Transactions The choice of listing is often driven by the company’s and its advisers’ perception of where investors might be most receptive to the IPO as well as potential future capital raises, eg, to finance M&A transactions. While IPOs are not frequent on Nasdaq Copenhagen, the market for secondary issuances on Nasdaq Copenha- gen is fairly active and has in recent years proven itself capable of accommodating significant capital needs from large cap issuers, eg, as part of high-volume M&A transactions. From a more regulatory and public M&A perspec- tive, whether a company’s choice to list on a foreign exchange would affect feasibility of a future sale depends on the rules regulating the relevant for- eign stock exchange and whether the foreign stock exchange is located within or outside the EU. A Dan- ish company solely listed on a foreign exchange (ie, no domestic listing) would generally be subject to the takeover regulation applicable in the relevant for- eign jurisdiction. However, if the foreign exchange is located within the EU, the takeover regulation in the jurisdiction of the exchange is likely derived from the
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