In the latest twist to Global's bid to buy the Classic FM and Capital owner, GCap shareholders reportedly called on Global to launch a reverse takeover of the media group.
A reverse takeover, a relatively rare event, is a way for a company to become publicly traded by acquiring a public company and then installing its own management team and renaming the acquired company. The combined company then has a single stock exchange listing.
One benefit of such a move to GCap shareholders would be that they retain a share in both companies. For Global, a stock exchange listing would boost its ability to raise finance for future acquisitions.
But according to a senior GCap executive, such a move would not reflect "any understanding of corporate finance". The source rebuffed suggestions that GCap shareholders had been pushing for a reverse takeover by Global: "There would be no logic in trying to keep the combined business on the stock exchange. It doesn't make sense".
Key GCap shareholders are believed to have named the price they would accept and to be on the verge of sharing the news with Global chairman Charles Allen.
However, GCap does not anticipate Allen will come back with a second offer until its chief executive, Fru Hazlitt, has made public her plans for the company next month.
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