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Reverse takeover

  • 04-12-2009 8:14am
    #1
    heno55
    Registered Users, Registered Users 2 Posts: 123 ✭✭


    can anyone explain what a reverse takeover is and how it would cause the shares in the company doing the takeover to be suspended from trading, the company i refer to is sound oil


Comments

  • #2
    ixus
    Registered Users, Registered Users 2 Posts: 2,435 ✭✭✭ixus


    Ask and you shall receive:

    FTAlphaville
    From the RNS on Friday morning:

    Sound Oil, the upstream oil and gas company with assets in Indonesia, announced on 20 October 2009 that it was in discussions about the possible acquisition of a company with oil assets offshore West Africa. As the transaction was expected to represent a reverse takeover under the AIM Rules, trading in the Company’s shares was suspended. These discussions reached an advanced stage but have now been terminated; accordingly the Company has requested that the suspension be lifted and trading in its shares is expected to re-commence at 8:00 a.m. this morning.

    To recap, the Sunday Telegraph reported at the weekend that rogue oilman (and master entrepreneur) Frank Timis had raised up to $100m (£60.5m) to list his new company, African Petroleum, on the London stock market via a reverse takeover of Sound Oil. This was the plan, according to the report:

    The new company will include assets off the Liberian coast that have been the target of a reverse takeover by Indonesia-focused Sound Oil, which had its shares suspended in October. Mirabaud Securities is advising on the AIM listing, which is expected to take place before Christmas, said sources close to the situation.


    Unsurprisingly no explanation is given for the collapse of the deal, but Sound Oil don’t seem best pleased:

    Commenting Gerry Orbell, Sound Oil’s Chairman, said:

    “It is unfortunate that this reverse transaction has collapsed as we committed significant time and effort to reaching a successful conclusion. We now intend to pursue vigorously our Indonesian assets and develop opportunities in that area using our cash resources judiciously.”

    And nor will those punters who piled into Sound Oil on the back of Frank’s stake building — he has amassed a 22.6 per cent holding in the company.

    Here’s the early price action in the company:


  • #3
    dunkamania
    Closed Accounts Posts: 1,803 ✭✭✭dunkamania


    I think its a smaller company taking over a bigger company. Shares are suspended to avoid price manipulation


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