Does OnMarket BookBuilds guarantee the shares are available? How does the transaction work?

When an offer is made available via OnMarket it means that the lead manager and company have made a portion of the offer available to all investors in the market. This information is made available by the company via the ASX Market Announcements Platform (MAP).

When investors apply for shares OnMarket, they are guaranteed that their application (whether they apply at a fixed price for a number of shares, or in a variable price transaction) will be treated the same as every other OnMarket application. That is, there will be no unfair scale-backs or investors who miss out completely for undisclosed reasons.

However, if there is high investor demand for shares in an offer, OnMarket investors may not receive all of the shares that they applied for. If there is scale-back, all OnMarket investors – retail and institutional – will be scaled back using the same formula.  Depending on the offer, this may mean for example, that everyone gets the same treatment for the first $2,000, then there is a different scale-back for all applications between $2,000 and $25,000, then a different scale-back for applications above $100,000.

OnMarket reserves the right to implement whatever scale-back mechanism it considers, in its absolute discretion, will provide for a fair outcome for all applicants and also meet the requirements of the issuer.  An issuer may, for example, only permit applicants below a certain threshold value participate via OnMarket.

To the extent that we are able, we will always keep you informed of any such application constraints.  However, circumstances may arise beyond our control, where we are not able to inform applicants in advance or where the allocations given to OnMarket are not determined until after applications have been received.

Rest assured that it is our mantra to treat all applicants fairly and to ensure, where we can, that applicants know the allocation procedures before they apply. 

Do you have more questions? Feel free to send them in to us