Backdoor Listings in Australia

Publisher:
Financial Services Institute of Australasia
Publication Type:
Journal Article
Citation:
JASSA, 2015, (1), pp. 24 - 32
Issue Date:
2015-03-31
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We study a large sample of Australian backdoor listings (BDLs) over the period from 1994 to 2014. BDLs account for roughly 13 per cent of all firms going public on the Australian Securities Exchange and are popular among hi-tech firms and those with foreign-domiciled assets. We find that the BDL market is likely influenced by the sentiment in the initial public offering (IPO) market, with the number of BDLs announced in a year being negatively (positively) correlated with the number of IPOs lodged (the percentage of IPOs withdrawn) in the prior year. Contrary to common belief, BDL transactions take longer to complete than IPOs, since they typically combine both a reverse takeover and the public listing process. Roughly three quarters of our sample raised equity capital as part of the BDL process.
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