IPO Communications and Investor Relations
The PBN Company 26 April 2011 PBN at a Glance
Offering: International Strategic Communications Consultancy Offices: Almaty, Kyiv, Moscow, Washington DC Affiliates: London, New York, Hong Kong Services: Financial Communications Corporate & Crisis Communications Government Relations / Public Affairs Employees: 80 History: Founded in 1983 In Russia and CIS since 1991
Shareholders: WPP, the world’s largest communications services company, owns 49.9% of The PBN Company; the remaining shares are owned by the company’s management.
Page 2 Top 5 IPO Communications Myths
Page 3 #1 Where Is the Market – The Geography Mistake
“ We are listed in London, therefore the people that we need to talk to are in London”
London
Astana
Page 4 Implications to Communications
Whether a company lists in London, Hong Kong, or even KASE the investor pool is similar
The way they think and behave is also similar
All of them read the FT, The Wall Street Journal, Reuters, Bloomberg, they all read first hand or at least learn about what is written in Business i Vlast, Kapital, Interfax, etc.
They depend heavily on the sell-side analysts sitting in Kazakhstan and elsewhere in the region (many in Moscow.)
The communications challenges are, by and large, the same where ever you list
Page 5 #2 Communications Know No Borders
“ To Kazakhstani press we say X, to international press we say YYY…”
Page 6 #3 Misguided Approach To Analysts
“ We only want to deal with the “best” analysts.”
Page 7 Investor Relations via Analysts and Media (Local and Foreign)
Media Kapital, Business i Vlast, Vedemosti, Kommersant, RBC Daily, Business FM, Interfax, Reuters, Bloomberg, Dow Jones, Breaking Views, The Times, Daily Telegraph, Financial Times, Wall Street Journal, … Company Investors
Analysts Visor Capital, Renaissance Capital, Troika Dialog, JP Morgan, Deutsche Bank, Morgan Stanley, Goldman Sachs, Merrill Lynch, Credit Suisse, UniCredit Aton, Antanta Capital, Uralsib, Metropol, …
Page 8 #4 Failing to Pre-empt the Dreaded “Publicity Guidelines”
Employees, agents and other representatives of the Company should be advised to follow these general principles in dealing with the press and public inquiries:
do not respond to press inquiries about the Offering; they should be referred to the designated representative;
do not disclose to the public information about the Offering, except as may be approved in advance by the designated representative;
do not provide any information to the press, public or employees about the Company's financial position other than information in the public domain;
do not speculate on the prospects of the Company generally; and
do not offer any opinion to the press, public or employees on the merits of participating in the Offering.
Page 9 #5 The Legal Position on IPO Communications
Page 10 What You Can and Should Do
Page 11 Understanding Market Context
Volatility in the markets. Residual concern about the levels of corporate debt, and fears of a double-dip recession
A competitive listing environment. Some $20bn of Russian share sales are forecast this year; reports of up to 140 BRIC offerings.
Investors who were hurt in the recent boom and bust cycle in Kazakhstan will look at new issues with greater scrutiny than ever.
Continued cynical view of Kazakhstani corporate governance controls attaches some risk premium
After nearly 18 months of inactivity, the capital markets are again opening as witnessed by a few CIS IPOs in the last two months, attracting a diverse mix of regional specialist and global industry funds.
The money is there – for good stories, well told.
Page 12 Formulate an IPO Messaging Strategy
Example Key Messages for a Notional IPO
Communicate the investment case beyond exposure to underlying assets
Highlight the strengths of the business model and the companies sector and positioning
Build reputation for probity of corporate governance
Leverage the reputation capital of the management team
Convince on the motivations for the fundraising and the strategic result
Get beyond the “newest Kazakhstani IPO” story; position the offering attractively in the global market
Demonstrate preparedness for regulatory change
Reinforce the compelling Kazakhstan macro-economic growth story
Page 13 Opportunities to Create a Favourable Information Backdrop
Considering an IPO in the future: No restrictions on communications
Decision to go - banks and lawyers appointed: “Publicity guidelines” come into effect
Formal announcement of intention to float (ITF): Virtual radio silence from this point on
Close of deal: 40-day blackout
The 40-day blackout is the last chance to prepare to open the doors to your new, extended family, all hungry for information
Page 14 Information Supply vs Demand Imbalance
Company Supply of Info
Intention to Float
Price Range
Roadshow
Pricing
Media / Analyst Demand for Info
Page 15 Pre-IPO Routine Communications
Define routine communications, before the lawyers define it for you
Use the “honeymoon” before you hire your IPO advisors to set precedent, after precedent, after precedent Update your website / include key corporate info Issue press releases in English and Russian, even if not necessary Put media coverage highlights on your website Announce financials (if appropriate) Develop key materials, eg company fact sheet
As a rule, if you don’t do it before, you can’t do it later!
Page 16 Leading up to Intention to Float
Can Do Cannot Do
Industry conferences Investor conferences
Routine info disclosure Non-routine info disclosure
Print interview (opportunity Live interviews to review)
Up For Discussion
Web updates, new materials production, background media briefings, site visits
Page 17 From ITF to Deal Close
Public Documents “Private” Documents
ITF Release Syndicate Analyst Presentation
Price Range Release Syndicate Analyst Research
Pricing (Deal Close) Release Prospectus
Fact sheet / website Roadshow Presentation
Manage media interest
Keep momentum
Maintain information flow
Media will write anyway, it’s best to stay involved
Page 18 Entering Black-out Period: Final Preparations
Year-long PR / IR plan in place, beginning with post blackout period launch (e.g media and analyst briefings)
In-house IR capacity / minimum one full-time IR contact
IR page on website
Other key corporate materials ready to go — presentations, Q&As, fact sheets
Psychological preparedness of senior management for a new public era - open, accessible and accountable
Page 19 And Then You’re Ready!
Page 20 The PBN Company Contacts:
Bruce Wilson [email protected]
78 Karasai Batyr Street Office 204-205 Almaty, Kazakhstan Tel: +7 727 239 1133
www.pbnco.com