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Bech-Bruun is assisting a bank consortium helping Genmab to obtain DKK 3.87bn in an offering and new listing on the Nasdaq Global Select Market in New York.

Danish companies access to capital via stock exchange listings and offerings to the public is frequently debated. Especially for small and medium-sized enterprises it often has to be considered whether a listing of shares is the best way to obtain capital and if so what market and which investors to address.

Genmab
In 2000, Genmab A/S (”Genmab”) was listed on Copenhagen Stock Exchange, now Nasdaq Copenhagen, and the German stock exchange Frankfurt Stock Exchange Neuer Markt.  The listing in 2000 was a success and procured a substantial capital base (+DKK 1.5bn) for Genmab, which as a biotech company with an ambitious product pipeline had capital-consuming activities. Already in 2002, the shares were delisted from Neuer Markt due to a restricted investor interest and low liquidity in the share on the German market.

Genmab is still a biotech company with an ambitious product pipeline. The company has commercialised a number of products and at the beginning of 2019 the company had a market value on Nasdaq Copenhagen of approx. DKK 63bn and a cash balance exceeding DKK 6bn. 

A number of Genmab's commercial partners are global pharmaceutical companies with solid bases in America and backed by considerable American investors, and a number of years ago, Genmab set up an ADR programme enabling American investors to indirectly acquire an ownership interest in Genmab. An ADR (”American Depositary Receipt”) represents an ownership interest in Genmab corresponding to one share, which is issued and paid up and subsequently deposited with a depositary bank, which issues an ADR that can be transferred.  

The possibility of access to additional and significant American investors interested in Genmab and their preference for investing in freely transferable securities listed in an American marketplace has in 2019 meant that Genmab has come back as listed in two markets.

 

Listing on the Nasdaq Global Select Market
As a mature, listed company, Genmab meets the requirements for having its shares listed on the Nasdaq Global Select Market, a market which according to Nasdaq itself is the market in the world with the strictest financial and liquidity requirements, corporate governance and disclosure requirements. 

Genmab has issued a total of 5% new shares primarily for American investors on the basis of a full prospectus prepared in accordance with applicable American stock exchange rules and approval thereof from the U.S. Securities and Exchange Commission.  

The offered securities are ADSs – American Depositary Shares, which are freely transferable electronically existing securities representing an indirect share in Genmab. The ADSs were offered such that 10 ADSs correspond to one ADR and thereby to one share in Genmab. The ADSs have a separate ISIN number and are listed for trading on the Nasdaq Global Select Market in New York. The ADSs are sold by a bank consortium, which at the same time has subscribed for the underlying shares in Genmab. The shares are listed for trading on Nasdaq Copenhagen and deposited in a depositary bank against delivery of ADSs, which may now be traded by the investors. 

The investors will not become direct shareholders in Genmab, but may exercise their financial and voting rights through a deposit agreement entered into with the depositary bank and Genmab. 
In the offering in July 2019, ADSs for an amount of DKK 3.37bn were initially sold and subscribed for and on the basis of a granted option to meet an additional demand in the market ADSs for a further DKK 500m were sold immediately after. At the close of trading on Nasdaq Copenhagen on 14 August 2019, Genmab's market value was DKK 85bn. 

The sale of ADSs was handled by a consortium of banks led by BofA Merrill Lynch, Morgan Stanley and Jefferies. Bech-Bruun has acted as the Danish legal adviser to the bank consortium.