Back Door Listing

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Back Door Listing

Informal for reverse acquisition. An act in which a private company purchases a publicly-traded company and shifts its management into the latter. This allows private companies to become publicly traded while avoiding the regulatory and financial requirements associated with an IPO. In order for a reverse acquisition to happen smoothly, the publicly-traded company is usually a shell corporation, that is, one with only an organizational structure and little or no activity. The two businesses can then merge the private company's product(s) with the public company's structure. It also makes initial trading less dependent on market conditions, a key risk in IPOs. However, it is important to note that a reverse acquisition only provides the private company with more liquidity if there is a real market interest in it.
References in periodicals archive ?
Many companies are opting to do backdoor listings now as an easier route to going public.
Manila Bay Development Corp eyes backdoor listing !-- -- Iris Gonzales (The Philippine Star) - June 3, 2019 - 12:00am MANILA, Philippines Manila Bay Development Corp.
The local bourse is, in fact, eyeing a total of P200 billion in capital-raising activities in 2019, including from at least six IPOs and backdoor listings.
Meanwhile, some of the backdoor listings include Dennis Uy-led gambling venture PH Resort, which made its presentation with the PSE last week; the listing of Uy's holding firm Udenna Corp.; and Tiger Resorts Asia Ltd., the operator of Okada Manila in Entertainment City.
These include the release of a consultation paper on backdoor listings and continuing listing criteria, as well as a review of the quality and performance of newly listed issuers.
Although the changes are focused on initial public offerings and backdoor listings, at least 212 ASX-listed junior miners would currently fail the revised "assets test" criteria, according to the report.
A large number of struggling mining companies listed on the exchange has provided technology groups with opportunities for "backdoor listings", whereby they go public by acquiring a company with an existing ASX listing.
Many of the firms currently listed on Korea's stock exchanges went public through reverse acquisitions and backdoor listings in 2005 and 2006, when an Asia-wide burst of interest in Korean pop culture infected investors.
Meanwhile, some of the backdoor listings include the Dennis Uy-led gambling venture PH Resort, which made its presentation with the PSE last week; the listing of Uy's holding firm Udenna Corp.; and Tiger Resorts Asia Ltd., the operator of Okada Manila in Entertainment City.
The exchange is keeping its target of 10 IPOs and backdoor listings for 2015, even after just one company announced plans for an IPO so far this year.
No less than 19 listed firms own one or more film-related companies that went public through backdoor listings. As for ancillary rights, the explosion of new media in this country has stirred activity in a market where ancillary rights have recently counted for very little.
Backdoor listings in various forms are not only to enter the market but for corporate restructuring.