BOOKBUILD
13 December 2017 By PDSNETA scenario in the share market where a company, or even an individual, sells a large amount of shares, called "the book", off market to institutional investors. In the case of a company, a bookbuild is done to raise a significant amount of money in the primary market. This is because it can sometime prove difficult to sell large amounts of shares easily or quickly through the secondary market (to private investors). Usually the directors will go on a road show to major institutions in order to liquidate a large amount of shares for immediate cash at a set price. This does not usually impact on the market price, however sometimes market sentiment regarding the sell off can negatively affect the price of the shares in the secondary market. Also see Accelerated Bookbuild. Two recent examples: PSG had an accelerated bookbuild in December 2015. In doing this it took advantage of the fact that its share price was above its "sum-of-the-parts" valuation of the shares in its portfolio. The second example is Dischem's bookbuild in December 2017.
Share this glossary term: