Corporate Structure & Equity Market Strategy

AWR Lloyd advises on how corporate structures can be best aligned to connect a company’s core ‘value stories’ with the strongest and most interested segments of the international investment community.

These assignments normally involve a number of sub-modules including: Fair Value Gap Analysis*, holding company discount analysis, takeover and activist shareholder contingency planning, equity capital markets trends and players analysis – and stock exchange listing strategy.

We help companies analyze whether their share prices are trading above or below ‘fair value’ – and what tools a company can deploy to close any gaps. We assess fair value based on best practice DCF (‘Valuation: DCF & SOTP’) and look at whether companies are trading in line with other listed market peers – or whether they are trading at a discount or premium to market multiples. If we reveal significant differences between share price performance and fair value or peer market multiples we then help our clients to understand why – and what they can do about it through investor relations and corporate finance strategies. Our Fair Value Gap Analysis* work is normally conducted in conjunction with a Market Signals Analysis to provide direct third-party investment community feedback.

We advise on optimal stock exchange listing structures and strategies, assessing which stock exchanges provide the best ‘windows’ to the investment and analyst communities most likely to have the interest and financial muscle to support a company’s share price. We assess the structure and trends in equity capital markets and help companies develop strategies for targeting investment institutions and securing analyst research coverage. This work is often used as preparation for IPO & Spin-Offs Transactions Advisory work.

We also advise listed clients with high free floats on takeover predator and activist shareholder contingency strategies. We first assess how potential predators might approach a takeover – for example via a ‘bear hug’ approach, an initial strategic minority position or via a direct all-out hostile takeover offers. We then assess who the potential predators might be and profile them. We recommend preventative measures and contingency plans. AWR Lloyd also provides Takeover Defense Transaction Advisory services if a predator actually takes a position in a company’s shares.

*Note: Fair Value Gap Analysis is a proprietary AWR Lloyd analytical tool.

For example: AWR Lloyd conducted an evaluation of a multi-billion dollar Asian energy conglomerate’s share price based on DCF and market multiples analysis. The study revealed both a significant discount to fair value and to peer multiples. We conducted a parallel ‘Market Signals Analysis’ involving fund manager interviews to help assess the reasons for the discounts. We advised on potential takeover defense strategies and recommended group restructuring measures, a share buy-back, an ESOP scheme and improvements to the company’s investor relations disclosure and communication programme. We also recommended a spin-off of the company’s power business via a separate listing. The client has implemented some of our recommendations and is considering implementing others.