Research On The Motivation And Performance Of Backdoor Listing In Publishing And Media Companies

One way to go public is the initial public offering（IPO）,the other is the backdoorlisting. Backdoor listing is a form of assets reorganization. From21century, mediaindustry grows up under the pressure of new media and international media groups.Historical experience shows that the mechanism for enterprises to achieve reform,strategic transformation, and development needs capital, so some publication mediacompanies are looking to capital markets. However, it’s not easy for publication mediacompanies to go public through IPO because of the double standard from relevantindustrial departments and stock supervisory committee. Limited by the policy,60percent of the listed publication media companies in A-share were achieved throughbackdoor listing.This article uses descriptive statistics and case study to research the backdoorlisting in media industry. Currently, no one has studied on backdoor listing inpublication media enterprises. This article analyzes general status of media industry’sbackdoor listing from the backdoors, shell companies and backdoor listing process indetail. According to research, the backdoors are mostly state-owned enterprises orinstitutions that have large industrial scale, sound capital structure and high level ofprofitability. The shell companies present some charicteristics of ownershipconcentration and poor business performance, but they still keep the ideal liabilities’level and the advantage of low borrowing costs. Besides, secondary offerings, equitytransfer and exchange of assets are the key operational mode. After2006, more andmore publication media companies go public because of the policy supporting, and mosttransactions took place in province with strong cultural or economic developed areas.Based on the analysis of the general status of media industry’s backdoor listing,this article selects Zhe Jiang Daily Media Group to research the backdoor listing’smotives and performance. According to research, Zhe Jiang Daily Media Group choosesbackdoor listing in order to avoid the IPO auditing system, obtain securities market’sdirect financing, conform good media resources in the group, improve corporategovernance structure and receive widespread positive publicity effect, making full useof local government policies at the same time. From performance, backdoor listing hasbrought a remarkable wealth for the backdoors, original shareholders and listed companies (600633).Based on the reseach and conclusion, this article argues that publication mediacompanies should take full account of their own actual situation, choose the right modeland shell companies, and strive to realize operational assets listed as a whole.