Grab in Talks to Go Public via SPAC Merger
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The technology platform and ride-hailing giant is reportedly considering a merger with an SPAC, but a U.S. listing via a traditional IPO is not off the table.
J.P. Morgan and Morgan Stanley, which are advising Grab on its IPO plans, are in the midst of identifying special purpose acquisition companies (SPACs) for the company to merge with to accelerate its listing process, according to a «Bloomberg» report on Thursday.
The Softbank-backed company’s listing considerations come after talks to combine with Indonesian rival Gojek collapsed, the report said. The latter is now in advanced discussions to merge with local e-commerce pioneer Tokopedia instead.
SPACs are shell companies, also known as blank check companies, that go public on a stock exchange in order to then buy private companies, which are then listed virtually through the back door.
They are also the hottest trend on Wall Street: the proceeds of SPAC IPOs grew from $14.7 billion across 96 issues in 2019, to $79.3 billion across 256 issues in 2020, according to data from Refinitiv. SPAC mergers also grew in value from $34.5 billion across 87 deals in 2019, to $157.5 billion across 163 deals in 2020.
Asian Bourses Consider Listing
The Hong Kong Exchange and Clearing is reviewing the possibility of adding SPACs to its offering while the Singapore Exchange could list them as early as this year.
Questions & Answers
Q.What is Grab reportedly considering for its public listing?
What is Grab reportedly considering for its public listing?
Grab is reportedly considering a merger with a Special Purpose Acquisition Company (SPAC) to go public. However, a traditional Initial Public Offering (IPO) in the U.S. Remains a possibility for the company.
Q.Which financial institutions are helping Grab with its listing plans?
Which financial institutions are helping Grab with its listing plans?
J.P. Morgan and Morgan Stanley are advising Grab on its plans to go public. They are currently identifying suitable SPACs for Grab to merge with to speed up its listing process.
Q.Why is Grab looking at a SPAC merger or IPO now?
Why is Grab looking at a SPAC merger or IPO now?
Grab's listing considerations come after previous talks to combine with Indonesian rival Gojek collapsed. Gojek is now reportedly in advanced discussions to merge with Tokopedia instead.
Q.What is a Special Purpose Acquisition Company (SPAC)?
What is a Special Purpose Acquisition Company (SPAC)?
A SPAC is a shell company, also known as a blank check company, that lists on a stock exchange. Its purpose is to acquire a private company, which then effectively becomes publicly listed through this 'back door' merger.
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