What is a “reverse takeover”? What procedures are necessary for a Listed Company to conduct one?
A reverse takeover occurs when a large unlisted company merges with or is acquired by a small listed company so that, in effect, the large unlisted company becomes a listed one. (This is considered to be an “improper merger, etc.” within TSE regulations.) As TOKYO AIM may attract smaller companies and/or companies seeking growth by acquisition, reverse takeovers may be more frequent on TOKYO AIM compared to current practice in Japan. In such a transaction, the enlarged entity will be required to re-list to the market as a new application. It will therefore have to submit a Re-Listing Application to the Exchange, append an Auditor’s Report thereto, and pass a resolution in a general meeting approving the reverse takeover.
