Equity - IPO question

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bos617

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Playtech raised approx. $265 million gross through an IPO of 103,142,466 ordinary shares at$2.57 per ordinary share. After the IPO, Playtech had 213,333,333 ordinary shares issued and outstanding.
Playtech received gross proceeds of approx. $34.3 million and net proceeds of $31.8. The ordinary shares that were sold to the public represented approx. 48% of Playtech ‘s total issued ordinary shares.
The shares commenced trading at 8:00AM on the AIM market of the London Stock Exchange where Playtech opened $2.74, traded 37 million shares between $2.68 and 2.74 and closed at $2.73.
Question:
1/ Approx. how many new shares were issued by the company by the company and how many shares were sold by the company’s founders? What fraction of their holdings in the company did the founders sell?
This is example 24 oh CFA 2016 Equity book. Somehow I dont know why I cannot copy and paste into here so I had to type the whole thing in. I dont understand the answer in the book. First of all, why did Playtech raise $265M via IPO and received a gross proceed of $34.3M?
This is the solution from the book:
Playtech received gross proceeds of $34.3M at $2.57 per share so the company issued and sold 13,346,304 shares ( = $34M/2.57) The total placement was $103,142,466 shares so the founders sold 89,796,162 shares (= 103,142,466 shares - 13,346,304 shares). Because approx. 200 million shares = 213M - 13.3M shares were outstanding before the placement , the founders sold approx. 45% (=90M/200M) of the company.
 
If I understand correctly (please correct me if I am wrong), the total amount raised ($265M) represents the sum of ALL the proceeds of the IPO that are earned by anyone who owned a piece of the company before the IPO. Thus, this also includes the shares of the company’s founders (say when the company was founded, the founder’s great aunt contributed capital as an angel investor and she owns 3% of the company).
When the company’s founders sell their part of the company, those sales’ proceeds go into their pocket and are not available to the company anymore (so the 3% of the great aunt goes back under her mattress and is not available to the company).
 
Regarding the amound of issued shares, this is my understanding of the process (again, please correct me if I am wrong):
“On 28 March 2006, Playtech raised approximately £265 million gross through an initial public offering of 103,142,466 ordinary shares at £2.57 per ordinary share. After the initial public offering, Playtech had 213,333,333 ordinary shares issued and outstanding.”
The IPO of 101,142,466 ordinary shares included:
1) The company’s shares
and
2) Shares of some of the owners (including the great aunt)
Given that we know that the company’s proceeds were $34.3M and the share price is $2.57 we can calculate that the company issued and sold approx. 13M shares and the remaining shares must have been sold by the owners (103M-13M=90M).
Next, we know that overall the company had 213M shares issued and outstanding after the IPO, and 13 were sold as part of the IPO by the company itself, the remaining shares (200M) must have been sold at some point before IPO (to angel investors or the owners contributions etc.). The owners sold 90M (90/200)and thus 45% of their part of the company.
 
Thank you very much. I got it now. The key is differentiating between what number of shares belong to the Playtech/the company, and what belongs to its founder.
 
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