ASX BookBuild combines the pricing and allocation controls that companies have in the traditional capital raising process with the network of the stock exchange.
Companies retain control over how much of the offer is allocated to investors chosen by the company and its lead manager. ASX BookBuild brings the additional benefit of accessing bids from all other brokers and their clients, who may not be clients of the lead manager.
This means companies can choose whether to accept higher bid prices from on-market brokers and their clients, or to allocate to the investors selected by the lead manager (that may be bidding at a lower price). At each price point, the company can see what proportion of the offer will be allocated to their chosen versus on-market investors. This ensures that the company knows that it is generating an optimal shareholder register and provides better price discovery.
ASX BookBuild is a fast, fair, efficient and cost effective way of ensuring that a capital raising is priced correctly and reaches the largest number of investors.
A short video describing how ASX BookBuild works is below. If you would like to access the ASX BookBuild Simulator, you can find it here.