Board authorisations for secondary issuances

On 4 December 2024, a legislative package referred to as the Listing Act entered into force, amending several EU regulations, including the Prospectus Regulation, the Market Abuse Regulation, MiFIR and MiFID II. It introduced significant changes, especially to the Prospectus Regulation and secondary issuances:

• The prospectus exemption for secondary issuances - typically used in accelerated book buildings (ABBs) or private placements - has been increased from 20% to 30% of the share capital and now also applies to public offerings (where the exemption has typically been used for offerings made to qualified investors or to fewer than 150 people). To rely on this new exemption for public offerings, issuers must publish an information document (max. 11 A4 pages) and file it simultaneously with the competent authority.
• A new exemption allows issuers whose securities have been admitted to trading for at least 18 months to issue and list new securities of the same type without any percentage limitation and without publishing a prospectus - again provided that an information document (max. 11 A4 pages) is published and filed with the competent authority.
• Issuers may still carry out private placements to qualified investors (or to fewer than 150 persons) without publishing a prospectus or an information document and now for up to 30% under the amended listing exemption. These types of offerings, including ABBs, are typically made pursuant to a board authorisation.

It has remained uncertain how the C25 companies would respond to the new simplified prospectus regime - in particular, the option to issue new shares representing up to 30% of the share capital without a prospectus.

We have reviewed the 2025 notices of annual general meetings for the C25 companies where available. Our review shows that, compared to previous authorisations, none have yet taken steps to increase their board authorisations to issue new shares - whether with or without pre-emption rights - in response to the increased threshold for secondary issuances introduced by the Listing Act.

It is also worth noting that both ISS and Glass Lewis have kept their proxy voting guidelines for 2025 unchanged, continuing to apply the same recommendations as in 2024 with respect to issuance authorisations, despite the regulatory developments introduced by the Listing Act.

Whether the amendments will lead to broader adjustments to board authorisations at AGMs later this year - or in the years ahead - remains to be seen. For now, however, the landscape is unchanged.

This newsletter is for general information only and does not constitute legal analysis or advice. Plesner is not liable for any actions taken based on its content. If you have any questions or need advice on Board authorisations for secondary issuances, please contact Plesner's Capital Markets team.