What is the take -off takeover?
When a private company acquires a public company to become public, it is referred to as return takeover. This type of transaction can sometimes be referred to as a reverse merger or a reverse initial public offer (IPO). There are several reasons why the company could use this type of merger.
The company sometimes takes over the takeover to become a public company without having to attach the initial public offer. Initial public offers can be expensive and time consuming and in some economic climate it can be difficult to achieve. If the company wishes to publish when there has been a great sale on the market, it may be the best option to take back.
Reverse takeover can also use a public company that cannot meet the criteria to be listed on the stock exchange, either because its price per share is too low, does not meet the thresholds of certain financial conditions or other reasons. In this case, the company, which performs a reverse takeover, simply acquires the company. This type of maneuver is sometimes called the rear door listing because the company that takes over the company acquires the list of stock markets “through the rear doors”.
In order to be mounted, the private company must buy enough shares in the public company to have a control interest. A private company can then vote for merging with a public company. After the merger is completed, shareholders or shareholders in a private company simply exchange their shares in this company for shares in a public company. In this way, because the merged company is publicly traded, the transaction effectively publishes a private company.
The disadvantage of using back -off to take over a private company is that a private company must have enough cash to buy a buying stake in a public companynation. For this reason, taking back takeover usually does not create further capital for the resulting public society. The initial public offer will provide the influx of capital into the now public society, sometimes significant. Reverse takeover will not have this effect. On the other hand, the value of the inventory of a private company is not so diluted, so the holding of the manager usually remains practically intact in this type of takeover.