A back door listing occurs when a private company acquires a publicly traded company and thus “goes public” without going through initial public offering (IPO).
On this news, Araneta family’s LBC Express (the private company) acquires FED which is a publicly traded company. Soon, stock symbol FED will be changed to LBC.
In case we forgot, LBC filed an application to conduct IPO February last year and hired UBS as its underwriter. Unfortunately, they withdraw their application saying “other fund raising opportunities have presented themselves and that it has decided to explore the same.” So yes, the “other opportunity” is the acquisition of FED then go backdoor.
Now what to expect on its fundamentals?
Well, you can throw away FED’s previous quarterly report as a start. Expect new board of directors to come in (if they havent done it yet). New asset allocations, new estimates, new roadmap, etc. Does that mean FED is really gone? Not exactly. But for simplicity, let’s just deal with LBC as a new stock. It wouldnt hurt naman siguro if we wait for the next quarterly report and see how the allocation went about.
I now wonder how the new LBC express goes head on with another publicly listed courier company, 2GO. Though they are not really a direct competitor – LBC is air and 2GO is on sea – one could argue that they’re playing on the same field. Well, I’ll just leave the headache to you.
