backdoor listing

Backdoor listing

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.

backdoor listing

Acquisition and merger with a listed company by an unlisted company in order to gain a listing on a securities exchange.
References in periodicals archive ?
SLI, which is led by businessman Exequiel Robles, became a public company through the backdoor listing route in 2007.
There were market speculations over last few weeks that the Ortigas property development firm may do either a backdoor listing or an initial public offering at the Philippine Stock Exchange.
PAL became a publicly-listed company after it did a backdoor listing in 2007.
Since PHEN is already a listed company, AC Energy could also explore the possibility of a backdoor listing. When asked about it, Francia didn't comment.
In Australia, DigitalBTC went public via a backdoor listing in 2014.
Holding went public in Shenzhen through a backdoor listing, according to data compiled by Bloomberg.
"What a backdoor listing is in its worst incarnation is an opportunity to get a listed business, which wouldn't be able to go through the front door," David Graham, the chief regulatory officer and head of the listing division at Hong Kong Exchanges & Clearing Ltd, said.
HONG KONG, Dec 21, 2015 - (ACN Newswire) - China Everbright Limited ("CEL", Stock Code: 165.HK)'s investment project Focus Media, China's largest outdoor advertising firm and one of the country's largest media companies, has completed the approval process for a backdoor listing on the A-shares market through Hedy Holding Co.
The consortium includes Meinian Onehealth Healthcare (Group) Co., Ltd, a provider of preventive healthcare services in China, which recently became an A share listed company through the backdoor listing of Shenzhen-listed Jiangsu Sanyou.
The latest deal will make Kim the leading shareholder of the new firm with a personal stake of 22.23 percent, and allow a backdoor listing of Kakao shares on the Kosdaq.
But to achieve a backdoor listing through asset injections, Alibaba would have to overcome similar hurdles to an ordinary IPO through the front door.
Tan is reported to have stated that a 'backdoor listing will make it faster to list PAL on the stock exchange.'