reverse takeover

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Reverse takeover

1) A smaller company taking over a larger company.
2) Merger of the acquiring company into the target company (often to gain a public listing).
Also see Acquisiton, Reverse shell merger.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Reverse Acquisition

An act where a private company purchases a publicly traded company and shifts its management into the latter. It also normally involves renaming the publicly traded company. This allows private companies to become publicly traded while avoiding the regulatory and financial requirements associated with an IPO. In order for a reverse acquisition to happen smoothly, the publicly traded company is usually a shell corporation, that is, one with only an organizational structure and little or no activity. The two businesses can then merge the private company's product(s) with the public company's structure. It also makes initial trading less dependent on market conditions, a key risk in IPOs. However, it is important to note that a reverse acquisition only provides the private company with more liquidity if there is a real market interest in it.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

reverse takeover

the TAKEOVER of one company by another company which has a lower stock market valuation (i.e. the value of the bidder's ISSUED SHARE CAPITAL traded on the stock market is less than that of the victim firm). A reverse takeover bid usually involves the bidding firm issuing shares or raising LOAN CAPITAL to finance the deal.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

reverse takeover

a situation in which a smaller but dynamic company wishing to expand rapidly takes over a larger but unprogressive company, issuing SHARES or FIXED INTEREST FINANCIAL SECURITIES to raise the necessary finance to purchase the shares of the larger co mpany. See TAKEOVER.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
The reverse listing resulted in PBT acquiring Prescient for a total consideration of N$1.59 billion, settled through the issue of additional PBT shares at N$1.35 each to Prescient shareholders.
While the appeals court decision isn't expected for 18 to 24 months, the two NMFS efforts should wrap up by next fall and affirm or reverse listing decisions, said Brian Gorman, a spokesman for the agency in Seattle.
At first, Oryx Diamonds, the latest gem miner to venture into the war-torn Republic of Congo (DRC), was determined to press ahead with its reverse listing on the London Stock Exchange.
Word parts dictionary; standard and reverse listings of prefixes, suffixes, roots, and combining forms, 2d ed.