Wednesday 7 April 2021 11:17 am

Ride-hailing giant Grab closes in on largest ever Spac listing

Asian ride-hailing giant Grab is said to be closing in on the largest ever Spac listing through a deal that will value the company at $35bn (£25bn).

The Singapore-based startup, which also offers food delivery and payment services, could finalise an agreement to list in New York via one of Altimeter Capital’s blank-cheque vehicles.

Read more: Ride-hailing giant Grab reportedly in talks over $40bn SPAC deal

Grab will merge with one of the US investment firm’s two special purpose acquisition vehicles (Spac), giving the Softbank-backed company a valuation of $35bn.

This would make it the largest ever Spac deal and comes as more and more companies turn to the backdoor listing method.

Grab is set to raise $2.5bn through a so-called Pipe [private investments in public equity] deal, where institutions buy stock directly from a company below market value.

Roughly $1.2bn of that will be funded by Altimeter, the Financial Times reported, citing three people familiar with the matter.

Altimeter will reportedly also backstop the sale of any shares in the Spac by public shareholders when the deal is announced. 

The figures, which may still change, are slightly below the initial agreement reported last month by the Wall Street Journal. However, it would still be by far the largest blank-cheque listing ever.

Grab, which was founded in 2012 and became south-east Asia’s first decacorn valued at more than $10bn, will merge with the Altimeter Growth I fund, which raised $450m last year.

California-based Altimeter, which has backed a string of tech giants, has raised a total of $850m for two Spacs. It also contributed to Pipe funding for Cazoo’s $7bn Spac listing.

Read more: SPAC phenomenon helps global M&A break $1 trillion barrier in first quarter

If the deal goes ahead it will be a crucial test for Asian unicorns looking to go public this year. Tiktok owner Bytedance is also reportedly considering an initial public offering.

Grab is yet to turn a profit, but posted a sharp rise in revenue in 2020 thanks to growth in its food delivery business.

Morgan Stanley and JP Morgan are advising Grab on the Spac merger talks.