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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › reverse takeover
company A- a private co, the bidder(not listed)
Company B- a public co, the target.(listed)
Company A purchased the shares enough to have a controlling stake in company B.
shares of B is exchanged with shares of A.
so, shareholders of A co. has shares of A and B.
and shareholders of B co. has shares of A and B(but not enough to have a control)
even after this, Company B is the only one listed. How can they trade shares of company A in stock exchange?
Because the shares in A are exchanged for shares in B, everyone only then owns B’s shares.
B is listed and so the ‘new’ A with only B’s shares in it, has become listed and the shares can be traded on the stock exchange.