What is the minimum class ratio for transactions classified as “reverse takeovers”?

Transactions classified as "reverse takeovers" occur when a private company acquires a public company, allowing the private company to bypass the lengthy and costly process of going public through an initial public offering (IPO). The minimum class ratio refers to the proportion of shares required for the transaction to be classified as a reverse takeover.

In the context of reverse takeovers, a 100% class ratio means that the shareholders of the private company must hold all of the shares of the public company post-transaction. This indicates that the newly combined entity is effectively controlled by the private company and its shareholders, retaining minimal to no influence from the existing public shareholders.

This high threshold is significant as it helps regulators ensure that the transaction is indeed a genuine merger of control and not merely a way for the private company to access the public markets while maintaining existing public shareholder influence. Thus, the minimum class ratio required for the classification of a reverse takeover is set at 100%, ensuring a complete transfer of control to the incoming private company.