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Source: Dmitry Demidovich, Shutterstock
Summary
- Grab is in talks about a merger with one of Altimeter’s SPACs for US IPO listing.
- US stock listing may boost its market value to around US$40 billion, according to analysts.
- Softbank, Toyota, and Uber are some of its prominent backers.
Singapore’s ride-hailing company Grab Holdings Inc. is looking for a US listing via SPAC later this year, which could bring its market capitalization to around US$40 billion, say analysts.
SPAC, or special-purpose acquisition company, are shell firms that help companies in stock-related issues, including stock exchange listings, through a merger. Grab is currently in talks for a merger with a SPAC affiliated to Altimeter Capital Management LP, a technology-focused investment firm.
The Singaporean company plans to raise at least US$3-4 billion in a SPAC merger, although the amount may change as talks with potential investors are still on, a media report said.
The announcement may come as early as next week, but if talks fail, Grab can still revert to a regular initial public offering (IPO) listing on one of the US exchanges.
If the deal comes through, it will be one of the high points in the recent craze for SPAC IPOs in the US. Recently, many companies have chosen the SPAC route to get listed in the US. This helps companies evade the time-consuming process of lengthy paperwork and the hassle of various certifications. Since SPACs are already listed, a merger can help the company registered in no time.
Grab also provides delivery services for different items, including grocery, restaurants, and other businesses. The company has several promoters including Toyota Motor, Uber, and SoftBank. Based on a fundraising round in October 2019, the ride-hailing company was valued at about US$15 billion.
Pic Credit: Pixabay.
SPAC IPOs Gain Popularity
One of the biggest SPAC deals last year was worth around $16 billion between United Wholesale Mortgage and Gores Holdings IV Inc. In February this year, EV company Lucid Motors Inc. merged with investment firm Michael Klein’s Churchill Capital Corp. IV in a deal estimated at US$12 billion.
According to fintech company Dealogic, which provides integrated content and analytics solutions to clients through its platforms, around US$70 billion has been raised for SPACs alone this year.
Besides Grab, several other companies are reportedly in talks about SPAC mergers. Those include Social Finance Inc., Shutterfly, and WeWork, an office-sharing firm.
Altimeter SPACs have raised around US$850 million in IPOs between October and January.
SoftBank is also one of the key promoters of the South Korean e-commerce company Coupang, which debuted on the New York Stock Exchange on Thursday. Soft Bank’s Vision Fund owns around US$20 billion worth of shares in the Korean company.
