Shareholder Contact Programs

Share Purchase Plans, Rights Issues, Shareholder Engagement

Raising capital is a difficult exercise for companies across the board and in tough markets it can become even more difficult. Companies are invariably turning to their existing shareholder base for further capital.

The success of any shareholder based capital raising is of course entirely dependant on the number who take it up, and that can depend on many things including the discount to the current share price; the share price as compared to the entry price of each shareholder and how well informed shareholders are as to the purpose of the raising and use of funds as well as the company’s activities.

Capital raisings that rely on a single communication of paperwork to each shareholder often have low take up due to people forgetting about it or not understanding it. However this level of take up can be magnified substantially be conducting a shareholder engagement or contact program.

PSS’s shareholder contact program is, we believe, superior to any other for the following reasons:

  • PSS uses the services of qualified and currently working stockbrokers to contact your shareholders on your behalf and talk them through the issue and the company
  • Our experience is that shareholders are far more inclined to “open up” and discuss a company and the issue when talking to a qualified broker
  • By providing brokers with as much information as possible about the company they are in a position to talk about it with knowledge when speaking to shareholders (in a general advice setting only, of course)
  • Brokers ask each shareholder a series of pre-agreed questions and all results are compiled and returned to the company
  • The company benefits from a larger number of brokers across a range of firms talking about their stock and taking an interest in it
  • Results from the many call out programs we have conducted indicate that the added take up from shareholders is substantial
  • The cost of the program is more often than not covered by as few as one or possibly two extra shareholders taking up the offer.

Capital raisings that rely on a single communication of paperwork to each shareholder often have low take up due to people forgetting about it or not understanding it. However this level of take up can be magnified substantially be conducting a shareholder engagement or contact program.