A Comparative Study Of Performance Commitments In Backdoor Listing

Backdoor listing has always been an important way for companies to go public.For SMEs,listing through an initial public offering(IPO)requires high time and capital costs,and because policy changes may result in an IPO channel that is not smooth,Low time cost has become an important choice for SMEs to go public.Performance commitment,as an important part of corporate mergers and acquisitions transactions,plays an indispensable role in protecting small and medium-sized shareholders,supporting mergers and acquisitions premiums,and promoting the successful completion of mergers and acquisitions.In the general case of back-to-back transactions,the performance commitment is often bought by the buyer and are often compensated by the seller or the restructured listed company.The buyer buys the assets through direct purchase or reverse merger.After the listed company,it is necessary to make certain guarantees for the development of new business.However,since 2017,there have been many M&A transactions in the market that have been promised by the sellers.That is,after the real controller of the listed company transfers the control of the company,it will make a performance commitment to the listed company after the merger and reorganization.This new form of performance commitment program design and implementation is very different from the it in the case of ordinary backdoor transactions.This paper applies case study method and comparative research method,selecting the transaction case of Hengli Group's backdoor Songfa shares as the main analysis object,and the case of Yuantong Express's backdoor Da Yang Chuangshi trading case as a comparison.It compares the differences in performance commitments between the two transactions by combing relevant announcements and policy documents.Based on the logical structure of M&A transactions,the author analyzes the causes of the differences between the two transactions.It can be explained:First,the performance commitment agreement has long been used as a trading price adjustment mechanism,in fact,it can also help enterprises achieve more diversified goals.Enterprises should be flexible in the process of mergers and acquisitions,and formulate terms of agreement according to their own needs.Second,in the case of a downturn in the equity market,the existence of a large number of small-cap companies has made the supply of "shell"enterprises bigger.In this market context,the sellers will pay more for the transaction,so the management is not good.Companies should consider more ways to solve the dilemma of the company.This paper has the following meanings.First,the current research on performance commitment is mostly about the performance,accounting treatment and protection of small and medium shareholders.There is little research on the performance commitment in the context of backdoor transactions,this article I hope to make up for the lack of relevant research fields by studying the performance commitments made by Hengli Group in the acquisition of Songfa.Second,in the research of performance commitment,most of the research on the factors affecting performance commitment is too abstraction and theorization.This paper will explore the impact of all aspects of M&A transactions on performance commitment from a more micro perspective.