UKLR 14.4 Reverse takeovers

1If a listed company is proposing to enter into a transaction classified as a reverse takeover it should consider UKLR 21.2.2G and UKLR 21.2.5G.

1Where a listed company completes a reverse takeover, the FCA will seek to cancel the listing of a listed company’s equity shares unless the FCA is satisfied that circumstances exist such that cancellation is not required. The FCA will have regard to UKLR 21.2.1R and the individual circumstances of the case.

1UKLR 14.4.6G to UKLR 14.4.8G set out circumstances in which the FCA will generally be satisfied that a cancellation is not required.

1Where:

1. (1)

   a listed company acquires the equity shares of a target;

2. (2)

   those equity shares are also listed in the equity shares (international commercial companies secondary listing) category; and

3. (3)

   the listed company wishes to maintain its listing of equity shares in the equity shares (international commercial companies secondary listing) category,

the FCA will generally be satisfied that a cancellation is not required on completion of a reverse takeover.

1Where a listed company acquires the equity shares of a target with a different listing category from its own and the listed company wishes to maintain its listing in the equity shares (international commercial companies secondary listing) category, the FCA will generally be satisfied that a cancellation is not required on completion of a reverse takeover if:

1. (1)

   the listed company will continue to be eligible for the equity shares (international commercial companies secondary listing) category following completion of the transaction;

2. (2)

   a listed company provides an eligibility letter to the FCA setting out how the listed company as enlarged by the acquisition satisfies each listing rule requirement that is relevant to it being eligible for the equity shares (international commercial companies secondary listing) category not less than 20 business days prior to the announcement of the reverse takeover; and

3. (3)

   the listed company makes an announcement explaining:

   1. (a)

      the background and reasons for the acquisition;

   2. (b)

      any changes to the acquiring listed company’s business that have been made or are proposed to be made in connection with the acquisition;

   3. (c)

      the effect of the transaction on the acquiring listed company’s obligations under the listing rules;

   4. (d)

      how the acquiring listed company will continue to meet the relevant requirements for listing; and

   5. (e)

      any other matter that the FCA may reasonably require.

1The FCA will generally be satisfied that a cancellation is not required on completion of a reverse takeover if:

1. (1)

   the target is listed with a different listing category from that of the listed company;

2. (2)

   the listed company wishes to transfer its listing to a different listing category in conjunction with the acquisition; and

3. (3)

   the listed company as enlarged by the relevant acquisition complies with the relevant requirements of UKLR 21.5 to transfer to a different listing category.

1A listed company proposing to transfer its listing to the equity shares (commercial companies) category, the closed-ended investment funds category or the equity shares (shell companies) category should consider its obligation to appoint a sponsor under UKLR 4.2.2R.