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.

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.

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.

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.
References in periodicals archive ?
Incubating company Darholding stated on Monday that its Nuformix portfolio company will list on the London Stock Exchange via a reverse takeover of Levrett PLC.
A reverse takeover refers to the acquisition of a publicly listed company by a smaller company, which is then merged with the listed shell company.
NMC had hinted at pursuing its offer for Al Noor Hospital, despite Al Noor's announcement last week saying it has reached an agreement on the terms of a possible reverse takeover by South Africa's Mediclinic International Ltd.
Chief Executive Doug Ware adds, "Whilst ideally we would have liked to avoid triggering a reverse takeover, we respect the Financial Conduct Authority's decision and will press ahead with completion of the company's prospectus .
David Redwood said: "We walked into a potential minefield by entering into a reverse takeover of a public company, however, Wragge & Co guided us most effectively to a safe end.
However, SGX rejected the reverse takeover because Zaw's name figures on the US sanction list.
PhotonStar has been headquartered in Romsey Hampshire since the reverse takeover of Enfis at the end of last year, although it retains its manufacturing base in Swansea.
A reverse takeover may also offend the principles in sections 602(a) and (c).
The stock was suspended from trading on July 15, after the company said it was n advanced discussions for acquisition which would constitute a reverse takeover.
Freedom4 also bought Vialtus - the voice-over internet firm and another former Pipex business - under the reverse takeover.
MIDAS Capital Partners, which was set up by Ormskirk investment expert Simon Edwards six years ago, has achieved a stock market listing with the pounds 140m reverse takeover of London's Iimia Miton Optimal.