BELGIUM Law and Practice Contributed by: Steven De Schrijver, Allegiance Law
3. Initial Public Offering (IPO) as a Liquidity Event 3.1 IPO v Sale Belgium primarily emphasises its support for SMEs, a sector that may not find significant advantages in IPOs. Consequently, Belgian companies often turn to private equity transac- tions or other funds as a means to secure fund- ing and enhance their financial standing. IPOs are notably infrequent as an exit strategy in Bel- gium. Although the IPO is widely acknowledged as a prestigious and lucrative way to gather funds, secondary sales and trade sales are frequently favoured for achieving a complete exit by share- holders. In contrast to the IPO, where sharehold- ers often retain their positions, secondary sales and trade sales tend to result in a complete exit for shareholders. Dual-track processes are typically adopted by investors seeking optimal flexibility and foster- ing competitive tension between the M&A and IPO paths. Owing to the substantial internal resources required, dual-track processes are generally reserved for companies exceeding a certain minimum size threshold. 3.2 Choice of Listing Euronext Brussels Euronext is a pan-European exchange that combines the stock exchanges of Amsterdam, Brussels, Lisbon and Paris into a single mar- ket. Euronext also has representatives in Ger- many, Switzerland, Spain and Italy. From young, growth-oriented companies to long-established enterprises, Euronext offers various types of markets with multiple entry points to provide issuers with a tailor-made listing offer.
Euronext Brussels is cited as a centre of excel- lence in biotech and has distinguished itself in regulated real estate companies. If the company is active in these sectors, listing on Euronext Brussels may be strategic because of the knowl- edge and investor community present. If the company already operates in Belgium, it may be familiar with local regulations and Euronext Brussels listing requirements. This can ease the process of an IPO compared with exploring a foreign exchange. Euronext has recently invested in new tech- nologies to automate the trading of financial products and has indicated its desire to grow by attracting new companies to list their shares on the exchange. Although there are challenges, such as regulatory issues and growing competi- tion from other exchanges, Euronext Brussels has a strong position as a major player in the Belgian economy and as part of the European stock exchange. Primary Equity Markets on Euronext Brussels Euronext Brussels classifies issuers into three compartments based on their market capitali- sation: • compartment A (large capitalisations) – issu- ers with a market capitalisation exceeding EUR1 billion; • compartment B (medium capitalisations) – issuers with a market capitalisation ranging from EUR150 million to EUR1 billion; and • compartment C (small capitalisations) – issu- ers with a market capitalisation less than EUR150 million. Alternative Trading Platforms Euronext Growth (formerly Alternext) is designed for mid-cap companies, offering a less stringent regulatory environment to avoid International
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