Negotiations are currently on for the public listing of ride hailing company Grab Holdings Inc using a special purpose acquisition company, said reports quoting sources with knowledge of the matter. The listing could set the valuation of the company at almost $40 billion which would make the company and its listing the largest ever blank-cheque deal of the world, said the reports quoting sources.
According to a report published by the Wall Street Journal on the same day, the ride hailing giant was in advanced stage talks with Altimeter Capital Management LP. The report further claimed that as much as between $3 billion and $4 billion from private investors is being targeted to by Grab to raise from the public listing.
The news that the Singapore-based Grab was exploring a public listing in the United States was first reported in the news agency Reuters quoiting source information.
Two SPACs – Altimeter Growth Corp and Altimeter Growth Corp 2, have been backed by Silicon Valley-based venture capital firm Altimeter. which of the two SPACs Grab was in talks with was not specified in the Wall Street Journal report.
Special purpose acquisition companies, or SPACs for short, are essentially shell companies that are created with the aim of raising funds through an initial public offering to take a private company public.
In recent times there have been a number of large public listing through the SPAC way including the merger of UMW Holdings Corp with a blank-check firm backed by billionaire Alec Gores in a deal worth $16 billion and the deal between luxury electric vehicle maker Lucid Motors struck with a Michael Klein-backed SPAC.
There were no comments on the news available from Altimeter as well as while Grab.
Reports also said that the ride hailing company is seeking to raise be at least US$2 billion through the listing. That would make Grub the largest overseas share offering made by any company from South East Asia.
With a market valuation of more than $16 billion, Singapore-based Grab is currently the most valuable start-up of the region. The company currently has operations in eight countries — Singapore, Cambodia, Indonesia, Malaysia, Myanmar, Thailand, Vietnam and the Philippines and is active in more than 500 cities and towns in the Southeast Asian region.
The company had planned to go public when its entire business is profitable Grab CEO Anthony Tan had said back in 2019.
But at present, only the ride hailing business of the group has managed to break even in all the markets it is operates in. There have however been reports that Grab had offered to pay up to $2.2 billion to Uber if the ride hailing rival does not go public by March 25, 2023.
Uber has the option to exercise a redemption right to “put all or a portion of its investment back to Grab any time after the redemption date … for cash,” According to Uber’s IPO prospectus. A redemption right lets investors make the company repurchase their shares after a certain period of time.
According to analysts, this could be a reason for Grab deciding to get publicly listed. this year itself.
(Adapted from BusinessTimes.com.sg)