How does a company make money from a reverse-takeover?

[andrea_green]

I am trying to understand the following news article:

http://www.equities.com/editors-desk/stocks/technology/keek-throws-a-hail-mary-and-goes-public

So my (potentially-flawed?) understanding of a normal public offering is that the owners of a company receive money from the underwriters (like Goldman Sachs) of the offering who then in-turn sell the shares to public.

In the case of Keek, the company purchased an already-publicly-traded company (in a bizarre unrelated business) for the purpose of being listed publicly. But how to the owners of the shares of Keek benefit from being listed publicly now? If I buy a share of the company does that somehow go directly to them?

[friedo]

Merging with an already-listed company saves them the trouble of going through the whole lengthy IPO process. Instead, they can use the existing company to do secondary share offerings directly to the public market, when they feel it is necessary.

[bob_2]

I was peripherally involved in a reverse take-over way back in the 70s (in the UK)

The company I worked for (now extinct) was ‘taken over’ by a much smaller company in the same line of business that was already listed. This was a cost effective method of getting the whole business to the Stock Exchange.

A search revealed this:

A takeover or acquisition where the target is larger than the bidder with the result that the target shareholders become majority shareholders in the bidder.
Under the Takeover Code, a transaction will be a reverse takeover if a bidder might as a result need to increase its existing issued voting share capital by more than 100%.
Under the Listing Rules, a reverse takeover occurs where a listed company acquires a business, an unlisted company or assets where any one of the percentage ratios calculated in accordance with Chapter 10 of the Listing Rules is 100% or more or which would result in a fundamental change in the business or a change in the board or voting control of the listed company. In this case the transaction must be subject to shareholder approval and a circular will be required. The combined group applying for listing will be treated as a new applicant.