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UKLR 10 Annex 1 Reverse takeover circulars – financial information

UKLR 10 Annex 1.1R

1A reverse takeover circular must include the following information:

  1. (1)

    when a listed company is acquiring an interest in a target which will result in a consolidation of the target’s assets and liabilities with those of the listed company:

    1. (a)

      audited consolidated financial information that covers:

      1. (i)

        the target; and

      2. (ii)

        the target’s subsidiary undertakings, if any,

      for a reporting period of 2 years up to the end of the latest financial period for which the target or its parent has prepared audited accounts; and

    2. (b)

      an explanation of the proposed accounting treatment of the target in the listed company’s next audited consolidated accounts;

  2. (2)

    when a listed company is acquiring an interest in a target that will be accounted for as an investment, and the target’s securities that are the subject of the transaction are admitted to an investment exchange that enables intra-day price formation:

    1. (a)

      the amounts of the dividends or other distributions paid in the past 2 years; and

    2. (b)

      the price per security and the imputed value of the entire holding being acquired at the close of business at the following times:

      1. (i)

        on the last business day of each of the 6 months prior to the announcement of the transaction;

      2. (ii)

        on the day prior to the announcement of the transaction; and

      3. (iii)

        on the latest practicable date prior to the submission of the reverse takeover circular;

  3. (3)

    when a listed company is acquiring an interest in a target that will be accounted for using the equity method in the listed company’s annual consolidated accounts:

    1. (a)

      a narrative explanation of the proposed accounting treatment of the target in the issuer’s next audited consolidated accounts;

    2. (b)

      audited consolidated financial information that covers:

      1. (i)

        the target; and

      2. (ii)

        the target’s subsidiary undertakings, if any,

        for a reporting period of 2 years up to the end of the latest financial period for which the target or its parent has prepared audited accounts, if available; and

  4. (4)

    where the information in (1), (2) or (3) is not available:

    1. (a)

      a statement by the board that the information is not available;

    2. (b)

      an explanation as to how the value of the consideration has been arrived at; and

    3. (c)

      a statement by the board that it considers the consideration to be fair as far as the security holders of the company are concerned.

UKLR 10 Annex 1.2R

1A reverse takeover circular must include, for each of the periods covered by the audited financial information in UKLR 10 Annex 1 1.1R(1) and 1 1.1R(3), the following information:

  1. (1)

    a balance sheet and its explanatory notes;

  2. (2)

    an income statement and its explanatory notes;

  3. (3)

    a cash flow statement and its explanatory notes;

  4. (4)

    a statement showing either all changes in equity or changes in equity other than those arising from capital transactions with owners and distributions to owners;

  5. (5)

    the accounting policies;

  6. (6)

    any additional explanatory notes;

  7. (7)

    the audit report; and

  8. (8)

    if the audited financial information includes a modified report:

    1. (a)

      whether the modification or emphasis-of-matter paragraph is significant to shareholders; and

    2. (b)

      if the modification or emphasis-of-matter paragraph is significant to shareholders, the reason for its significance.