The listing, which will be the biggest SPAC merger so far, could see Grab raising about $2.5 billion through a private investment in public equity (PIPE) deal that involves the selling of publicly traded common shares to private investors at a discounted price. About $1.2 billion will be funded by Altimeter.
According to the report, the deal values the SoftBank-backed technology group at about $35 billion and could take place as soon as this week. As part of the deal, Grab is likely to merge with Altimeter Growth Corp 1, one of Altimeter Capital’s SPAC vehicles, which raised $450 million last year.
Silicon Valley-based venture capital firm Altimeter, which manages more than $15 billion in public and private tech investments, has backed two SPACs – Altimeter Growth Corp 1 and Altimeter Growth Corp 2.
Grab has so far raised $12 billion and has about $5 billion in cash reserves, putting its private valuation at more than $16 billion, per the FT report.
Grab’s listing plans via the SPAC route come after talks to merge with Indonesian ride-hailing rival Gojek fell through last year. Following the collapse of talks, Gojek entered into merger discussions with Indonesian e-commerce giant, Tokopedia, instead. Gojek and Tokopedia are likely to head for a traditional IPO if merger talks are successful.
In September last year, Grab was also reported to be raising $3 billion from China’s Alibaba Group but the transaction did not materialise following a flurry of events leading to affiliate firm Ant Group pulling off its record IPO in November and the crackdown by Chinese regulators on its subsidiaries.
Grab’s plan to list comes amidst a spate of recent IPO and SPAC announcements centering Southeast Asia’s internet unicorns, signaling a growing urgency to raise more capital.
SPACs are blank cheque companies formed only to raise capital to acquire other businesses. They typically acquire firms as quickly as four to five months and are given up to two years to seek targets. If they cannot fulfill that mandate, they will have to return all the money to the public shareholders.
Global SPACs have raised as much as $24.26 billion in January 2021 alone. The total amount raised by SPACs in 2020 was $79 billion, according to data compiled by DealStreetAsia.
In Southeast Asia, the biggest SPAC is Bridgetown Holdings, which is backed by Hong Kong tycoon Richard Li and venture capitalist Peter Thiel. Bridgetown, which raised $595 million, is reportedly considering a potential merger with Indonesia’s e-commerce giant Tokopedia in a deal that could value the unicorn at $8 billion to $10 billion.