Overview

Picture this it's 2 a.m., a large anonymous meeting room with a board table capable of seating 24. The tabletop is covered with copies of the most recent draft of the prospectus, crumpled pieces of paper with discarded edits, old prospectuses being used as precedents, and a couple of copies of the regulatory requirements. On top of this add several half-empty pizza boxes, innumerable empty soda tins and at one end of the table, six lawyers arguing over the use of the conditional subjunctive case in a sentence on page 123 of the current draft. At the other end, two junior investment bankers toss a cricket/baseball back and forth, while just outside the room, mid-level bankers mumble into their cellphones or check their Blackberries for emails.

While this seems glamorous to final year students and MBAs, the sheen wears off quickly. Notably, because the scene can play out night after night and frequently go through the night when trying to meet a filing deadline. The glamorous side of an IPO, if there is one, is the marketing of the deal. Preparing the disclosure documents and legal agreements is a grind. Perhaps this is why more and more of the documentation drafting has been farmed out to lawyers working on the deal.

Underpinning the documentation is the due diligence investigation of the issuer's financial and business history, as well as its prospects. Because documentation requirements are country-specific, this chapter takes a general view of the prospectus and its contents.