Puig protects shares with the most votes from potential sale to third parties | Companies

The Puig family has secured political and shareholder control of the Catalan cosmetics group following the completion of the IPO, scheduled for May 3. On the one hand, with the double classification of shares, with the help of which he structured capitalization…

The Puig family has secured political and shareholder control of the Catalan cosmetics group following the completion of the IPO, scheduled for May 3. On the one hand, thanks to the dual classification of shares with which the capital of Puig Brands was structured, the company that will be listed on the market reserves the securities with the greatest political power, the class A securities that will not go away. in the market and who have five voting rights at the meeting, while those who are in class B, those who take the floor, will have only one. And on the other hand, with the protection of these actions from possible transmission of the virus to third parties outside the family.

This is exactly how it has been linked thanks to the latest legislative reform that the Catalan company has undertaken in recent weeks. As recorded in the Official Gazette of the Trade Register (BORME), Puig Brands has amended more than a dozen articles and added about 10 others, as well as a transitional provision that marks the validity of some of them after the company’s listing on the stock market. . Much of the legislative reform has to do with the effect of the dual classification of shares and the rights they confer and, as this newspaper has been able to verify, the terms of their transfer that are stricter than those of Class A, which also have a par value of five times that of the Class B.

The class A securities, according to the prospectus, are in the hands of Puig SL, a company in which about twenty companies associated with various branches of the family participate. After listing, these securities will represent 68% of the capital, but will have an even greater weight – 91% – in the decisions of the board of directors.

Hence the shielding, which is reflected in the new regulations. In accordance with them, and from the moment the shares included in the IPO are admitted to trading, the margin of movement of Class A shares will be very limited. The Charter establishes that their free transfer will be possible only to other holders of this type of securities or, alternatively, to other companies included in the group. And when this transfer is planned to be made to a third party who does not meet these criteria, a double preemptive right of subscription will come into effect, which will practically guarantee that the shares will not leave the family perimeter. In this case, the shareholder wishing to make the transfer must first notify the board of directors, to whom he must also indicate the number of securities he wants to sell and the identity of the person interested in purchasing them.

From this moment on, the right of first refusal will be activated. First, the remaining shareholders who also own Class A shares will be given a period of five days to make a decision. If they do not exercise their right, or if they do so but do not cover all the shares they wish to sell, the company itself will have the option of holding those securities for seven days after the expiration of the previous period.

The articles of association provide for a scenario in which the proposed transfer takes place because the preferential subscription has not been completed. But here Puig is saving himself a new letter because he will require the seller to demonstrate that the terms of the final sale are the same as those communicated to the board in the first place. And if this does not happen, each owner of Class A shares will have an exit right, which will allow him to buy these securities at the last stated price.

This will be determined by mutual agreement between the seller and the buyer. If other shareholders or the company exercise their right of first refusal and do not agree to it, the original price transferred by the seller to the board of directors will prevail. In any case, Puig is considering a free conversion of Class A securities to Class B for shareholders who are considering this option, which would provide an easier exit route. However, the buyer will receive shares with much less political rights.

Voice and voting at a meeting

In any case, as is already known, Puig’s new shareholders will have a weak position on the board of directors. But in addition, the company also tightened the right to help. As part of this legislative reform, it was established that only those who held more than 1,000 shares of any type would be able to have voting rights and vote in them.

This practice, for example, is not core to the policy of the Ibex 35 companies. Less than half of them set a minimum level of shares, and only three, Caixabank, Mapfre and Unicaja, reach the 1,000 required by Puig. Other companies, such as Inditex or Iberdrola, do not set any scale. In any case, this has not reduced the Catalan company’s appetite for an IPO.

Follow all the information Five days V Facebook, X And LinkedInor in our newsletter Five days program