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 ?
"Your board has continued to review a number of potential opportunities for a reverse takeover," Tau Chair Gerwyn Williams said.
The company was previously called Golden Saint Resources when it was an early stage gold and diamond explorer but changed its name last April following the reverse takeover.
Industrial magnate Mr Gupta, saviour of a threatened aluminium smelter in Lochaber, and Atlantis Resources chief executive Tim Cornelius celebrated a reverse takeover handing nearly 50% of Edinburgh-based Atlantis to Mr Gupta's GFG Alliance.
A reverse takeover refers to a transaction whereby a privately held company buys enough shares to control a publicly traded 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."
There are quite a few companies that are asset-rich but have no source of liquidity," said Andrew Rickards, CEO of property giant Yoma, listed on the SGX since 2006 through a reverse takeover,
- 16 Feb 2012, Umirzak Shukeyev, head of Samruk-Kazyna, told Kommersant that the fund was considering a reverse takeover of NC KMG by KMG EP.
Mobile Internet technology company XcelMobility Inc (OTCBB:XCLL) has completed a reverse takeover of CC Mobility Limited, the company announced today.
The company is establishing Goliath Gold Mining Ltd following the reverse takeover of White Water Resources Ltd (WWR.JO), a Johannesburg-listed investment holding company.
It will be remembered that the Panel twice ruled in favour of Noble Group against the reverse takeover of Gloucester Coal that would have resulted from Gloucester's bid for Whitehaven Coal.