P2P (Public to Private)

Rating withdrawal: schizophrenic communication?

Delisting is a financial operation involving the withdrawal of a company’s shares from the stock exchange. This operation is often motivated by strategic reasons, such as the company’s desire to concentrate on its core business, or to protect itself from the pressures of the stock market.

Withdrawing a rating can be a complex and delicate operation, particularly in terms of communication. Indeed, the company has to announce to its shareholders that they must sell their shares, which may be perceived as a breach of trust.

How do you tell shareholders that they have to sell their shares while preserving the company's fundamentals and reputation?

Communication of the withdrawal must be transparent and honest.

The company must explain to shareholders the reasons for its choice and the terms of the operation. It should also highlight the benefits of delisting for the company and its shareholders.

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Is shareholders' attachment to the company (affectio societatis) an insurmountable obstacle?

Shareholders’ attachment to the company can be an obstacle to delisting. Indeed, some shareholders may be attached to the company, not only rationally but also emotionally. A planned withdrawal, starting with a takeover bid, can be seen as an expropriation.

To overcome this obstacle, the company can offer shareholders an attractive withdrawal premium. It can also highlight the benefits of delisting for the company, such as the opportunity to invest in new projects or focus on its core business.

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In addition to price, what are the key factors for a successful takeover bid?

Price is important, but it’s not enough on its own to convince shareholders to sell their shares. The company can also highlight the other benefits of rating withdrawal, such as :

  • Maximum legal and financial flexibility,
  • An unattractive scholarship record and the difficulties of financing oneself via the scholarship,
  • Reduced costs associated with stock market listing,
  • The ability to make strategic decisions more quickly.

Identifying your shareholders: an essential prerequisite?

Before launching a delisting operation, the company must identify its shareholders. This will enable him to communicate with them more effectively.

See our page on shareholder identification

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Adapting the strategy: investor relations, shareholder marketing, press relations, advertising, print publishing, web publishing, events

The delisting communication system must be adapted to the size and structure of the company, and to the type of shareholders targeted.

In general, the device consists of the following components:

  • Investor relations: management of relations with existing and potential investors, including roadshows, conference calls and one-to-one meetings,
  • Individual shareholder marketing Shareholder relations: raising existing shareholders’ awareness of the benefits of the takeover, in particular through shareholder letters, a hotline, newsletters, events or an outbound call campaign. The outbound call campaign is particularly well-suited to this type of operation, to raise awareness among shareholders who may not have been reached by other means,
  • Press relations: communication with the media to raise awareness of the OPA and its challenges, and to encourage recommendations that support the operation,
  • Advertising: targeted communication with existing shareholders,
  • Web publishing: creation of content dedicated to the operation on the company’s Investor website.
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Withdrawing a rating is a complex operation that requires appropriate communication. By anticipating shareholders’ reactions and highlighting the benefits of the operation, the company can increase its chances of success.

Calyptus is a French financial communications agency specializing in communications for listed SMEs. We have extensive experience in the communication of withdrawals. We can support you at every stage of your project, from identifying your shareholders to setting up your communication system.

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