Overview

Preparing a company for flotation requires the involvement of a large number of players, each with a specific role to play. The leading participant, and generally the first advisor appointed, is a merchant bank or an investment bank. Occasionally other professional advisors, such as stockbrokers or chartered accountants, can take this important role. In the UK, this financial advisor is formally known as the sponsor, as it sponsors the company in its application to join the stock exchange. If the issuer is launching its IPO on Britain's Alternative Investment Market (AIM), the sponsor is called the nominated advisor.

In international offerings, the lead bank will be known variously as the lead manager, bookrunner or global coordinator. In the USA, the principal bank is known as the lead manager, but members of the offering syndicate (including the lead) are called underwriters. Chapter 10 contains more information on syndicate terminology.

In general, I will use the terms lead manager and lead banker when referring to the most senior bank's role. Occasionally I will use the term sponsor when referring to exclusively UK deals.

As the markets have developed and become more sophisticated, the personnel involved in a new issue have become specialists. Now, only a few people at the lead investment bank involved in the transaction will have a full understanding of the status of both the legal and marketing aspects of the offering.

The sponsor, or lead manager: develops the structure of the offering; helps to appoint other participants (solicitors,...