Editing Takeover (section)

=== Reverse takeover ===
{{Main|Reverse takeover}}
A ''reverse takeover'' is a type of takeover where a public company acquires a private company. This is usually done at the instigation of the private company, the purpose being for the private company to effectively [[Float (finance)|float]] itself while avoiding some of the expense and time involved in a conventional [[initial public offering|IPO]]. However, in the [[United Kingdom|UK]] under [[Alternative Investment Market|AIM]] rules, a reverse takeover is an acquisition or acquisitions in a twelve-month period which for an AIM company would:
* exceed 100 percent in any of the class tests; or
* result in a fundamental change in its business, board or voting control; or
* in the case of an investing company, depart substantially from the investing strategy stated in its admission document or, where no admission document was produced on admission, depart substantially from the investing strategy stated in its pre-admission announcement or, depart substantially from the investing strategy.

An individual or organization, sometimes known as a [[corporate raider]], can purchase a large fraction of the company's stock and, in doing so, get enough votes to replace the board of directors and the [[Chief executive officer|CEO]]. With a new agreeable management team, the stock is, potentially, a much more attractive investment, which might result in a price rise and a [[Profit (accounting)|profit]] for the corporate raider and the other shareholders. A well-known example of a reverse takeover in the United Kingdom was [[Darwen Group]]'s 2008 takeover of [[Optare plc]]. This was also an example of a back-flip takeover (see below) as Darwen was rebranded to the more well-known Optare name.{{citation needed||date=May 2024}}