Q&As

What is a 'pathfinder' or 'path-range' prospectus?

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Produced in partnership with Nothando Malaba of Hogan Lovells and Maegen Morrison of Hogan Lovells
Published on LexisPSL on 20/03/2017

The following Corporate Q&A produced in partnership with Nothando Malaba of Hogan Lovells and Maegen Morrison of Hogan Lovells provides comprehensive and up to date legal information covering:

  • What is a 'pathfinder' or 'path-range' prospectus?

What is a 'pathfinder' or 'path-range' prospectus?

A 'pathfinder' or 'path-range' prospectus is a draft prospectus that is issued before the final prospectus (approved by the Financial Conduct Authority (FCA)), is published. It is typical for the pathfinder to have an indicative price range within which the final offer price will usually be determined. In the US, the pathfinder is usually referred to as a 'red-herring' or 'red' prospectus.

A pathfinder is used in order to assess the level of demand in the market for the securities on offer. This is achieved by distributing the pathfinder to prospective investors during roadshows and the book-building exercise.

While the pathfinder does not require the FCA's approval, it is usual practice for the pathfinder to be close to final version of the prospectus and for it to have therefore gone a substantial way through the FCA's review process.

Content

The pathfinder contains most of the information that you would expect to find in the final prospectus, subject to certain exceptions. As it is essentially a draft document, certain information which has not yet been finalised will not be included in the pathfinder, for example:

  1. the pricing of the securities

  2. the final timetable

  3. the capital raising statistics (such as, number of securities to be issued, gross

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