What is reverse book building?

The practise of reverse book building is used to discover prices quickly. Public shareholders can offer their shares at or over the floor price whenever a firm discloses a delisting plan. Shareholders can do so using an online bidding mechanism on stock exchanges that is open for five days.

Reverse book building is the process by which a company that wants to delist from the exchanges, decides on the price that needs to be paid to public shareholders to buy back shares. It is a process used for efficient price discovery.

Once a company announces a delisting plan, public shareholders can tender their shares at or above the floor price. Shareholders can do this through an online bidding system on the stock exchanges, which stays open for five days.