Cash box placing definition

A share for share exchange for the purposes of the Companies Act 2006 (CA 2006), falling under the exception to pre-emption rights for an issue where the consideration is non-cash consideration. Under a cash box placing, a spv is incorporated as a subsidiary of the buyer. An investment bank subscribes for the SPV’s preference shares, providing the SPV with cash. The investment bank funds the subscription price for the SPV’s preference shares out of the proceeds of a placing of equity securities of the buyer (the placees paying the offer price into an account set up for and on behalf of the investment bank). The buyer then allots and issues shares to these placees in consideration of the transfer of the preference shares in the SPV (whose asset is the cash from the placing) from the investment bank (CA 2006, ss 561 and 565).