Rules for reverse takeovers are made easier

REVERSE takeovers are likely to become more common after the UK Listing Authority (UKLA) yesterday changed the rules to make them easier.

The watchdog has made the financial requirements for the process, where a company buys a larger unlisted or foreign firm, less stringent.

One of the most fundamental changes is a simplification of a rule where listed companies had their shares suspended until they could provide fully audited data for the last three years. Now this information, a factor that made reverse takeovers unpalatable for many firms, is not required to be so exhaustive.

The UKLA will also stop firms from avoiding the rules by creating a new holding company, or “topco”, as the Pru did in its failed AIA bid.