Underwriters get the Rump Steak13 Apr 2023 10:57
Easy money if you were one of the underwriters as not only do you get 2.375% commission and potentially a discretionary add on for being an underwriter on what was at face value a low RI price but the underwriting agreement has also been written so that if there were any rump shares left then you as an underwriter can nicely pocket further profit above the issue price simply by buying the shares yourself and selling them on at any later date. Perhaps when things get closer to TERP for a nice further 30% plus profit.
Don't be surprised if there aren't many available to "place" onto the market.
"In connection with the Offering, each of the Underwriters and any of their respective affiliates or persons acting on their behalf, may take up a portion of the New Shares and the Subscription Rights as a principal position and in that capacity may retain, subscribe for, purchase, sell, offer to sell or otherwise deal for their own accounts in such New Shares and Subscription Rights and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, references in this document to the New Shares and Subscription Rights being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue, offer, subscription, acquisition, placing or dealing by each of the 300 Underwriters and any of their affiliates in such capacity. In addition, certain of the
Underwriters or their affiliates may enter into financing arrangements (including swaps, warrants or contracts for difference) with investors in connection with which such Underwriters (or their affiliates) may from time to time acquire, hold or dispose of Subscription Rights or New Shares. None of the Underwriters or any of their affiliates
intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so."
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