Reverse takeover - Canada
Reverse
takeover - Canada
Reverse takeover is transaction in which public company listed
on a stock exchange in Canada with few or without assets (often
referred as shell company) acquires all securities of a private company
with a significant assets and operation. It is considered a less expensive and
time consuming alternative to initial public offering (IPO). This way public
companies acquires all securities of public company and it becomes direct or
indirect wholly-owned subsidiary. Shareholders of the private company receive
shares from the public company and the
operating company's shareholders ultimately acquire a controlling interest in
the new, combined company.
Shell companies may be created and maintained
just for purpose of reverse takeover or it can be existing company,
a reporting issuer that have previously ceased operations, but still
maintain their reporting issuer status and usually have the shareholders
required to list on a stock exchange. This makes them ideal candidates to
complete an RTO transaction to take a private company public. The choice of
structure used to implement an RTO transaction will depend on number of
factors: the business sector in which the private company operates, legal and
tax consideration, the number of shareholder and their location, deal process
and timing matters. An reverse takeover transaction generally includes
negotiations and discussions among parties, due diligence, shareholders meeting, preparation
of disclosure documents containing-prospectus level disclosure
concerning each of the companies and prescribed financial statement,
review of and changes to corporate governance governance structures and
policies to ensure that securities law and stock exchange requirements are
met, review of transactions and related disclosure documents.
Securities held by officers, directors and other insiders will be subject
to the escrow policies of the relevant stock exchange.
If you are interested in going public and you
currently meet NEO's or CSE's requirements or will meet them following a public
offering, we encourage you to contact us and
we can assist in completing the listing application form. The listing
application and the required due diligence can be done concurrently during the
process of become a reporting issuer in Canada.
MinaMarGroup.com
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