Reverse Leveraged Buyout

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Definition: Reverse Leveraged Buyout

A reverse leveraged buyout occurs when a private company which is not listed in the stock market makes an offer to buy a public company by promising to buy all the shares and assets of the company and to completely make the company private.

This type of a buyout also results in the private company using the assets of the public company as a collateral till the complete buyout finishes successfully and all the shares are transferred to the private entity. 

This results in the de-listing of the public company and it becomes a part of the private firm and thus cannot be regulated anymore by the stock market regulations.


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