The19 Oct 2016 21:33
way I'm looking at this is, ACO is looking to raise £10m @ 15p with the issuance of some 66m shares. Now, the existing shares are pretty much all accounted for, so any instituation looking to acquire a reasonable sized holding can only do so through the latest offer, as can already be seen with the take up of £600,000 worth that we know about so far.
At some point, a notification will be made to the market of whom has subscribed and as the SP is below 15p, it stands to reason that the SP will move up to the offer price.
Of course, the $6m dollar question is, what opportunity will entice investors to buy the offered stock?
What strikes me as odd is the name change. There are two generally accepted meanings of a RTO.
http://www.investopedia.com/terms/r/reversetakeover.asp
Firstly and most widely accepted definition -
"A reverse takeover (RTO) is a type of merger that private companies use to become publicly traded without resorting to an initial public offering (IPO). Initially, the private company buys enough shares to control a publicly traded company. The private company's shareholder then uses its shares in the private company to exchange for shares in the public company. At this point, the private company has effectively become a publicly traded company. An RTO is also known as a reverse merger or a reverse IPO."
And secondly, the alternative definition -
"A reverse takeover can also refer to an instance where a smaller company takes over a larger one. It is so named due to the fact that it is the lesser expected arrangement of the traditional takeover of a smaller business by a larger one."
Now looking at Gulf Energy's website, they are in the process of undertaking an IPO to become a Plc...which is probably the reason for their interest in ACO as a clean Plc shell, so the first definition [quoted above] of a RTO applies in that instance.
Now the main reason Gulf want to float is that they have a vast licence that they can't currently afford to exploit and are looking to raise investor capital by floating.
Imho, we will see the first definition of a RTO taking place here. The acquirer (incoming private company) wanted the capital fundraise provision (latest share offer (66m shares for £10m)) agreed before continuing. The subscription shares represented 53.62% of the issued stock giving the acquirer a controlling, majority interest, hence the resignation of the existing BoD.
So working on this premise, why bother with a name change? Normally, the acquirer is an established private company who would, of course, already have a company name i.e. Gulf Energy.
So I think it is likely that the new investors (Heartwell et al) are planning to launch a new enterprise with substantial institutional investors whilst retaining the name Acorn Growth Plc. Enterprises that spring to mind might be Property or Infrastructure Investment/Portfolio manage
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