CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Grab IPO: what to know and how to buy Grab shares

The ride-hailing and food delivery app could merge with a special purpose acquisition company as soon as this week.

  • Southeast Asia’s most valuable company, Grab Holdings, is set to list in the US
  • It will merge with one of Altimeter Capital Management’s special purpose acquisition companies (SPAC)
  • The deal will value Grab at US$35 billion, making it the largest ever blank cheque agreement in history
  • Concurrently, Grab will raise US$2.5 billion through a private investment in public equity deal
  • You can trade or invest in the Grab SPAC, Altimeter Growth Corporation, before the merger with an IG account

Grab to merge with SPAC

It’s official. Grab Holdings, Southeast Asia’s largest unicorn, will go public in New York via a merger with one of Altimeter Capital Management’s SPACs in a deal valuing the app at US$35 billion.

The agreement, the largest ever blank cheque deal, could be finalised as soon as this week, sources familiar with the matter told The Financial Times (FT).

In tandem with the merger, Grab will raise about US$2.5 billion through a private investment in public equity (PIPE) deal, in which common shares will be sold to private and institutional investors at a discounted price.

Silicon Valley-based venture capital (VC) firm Altimeter, which has a portfolio size of over US$15 billion, will purchase an estimated US$1.2 billion worth of PIPE shares.

Grab will combine with either one of the VC firm’s SPACs, namely Altimeter Growth Corp 1 and Altimeter Growth Corp 2.

The self-described super app has raised US$12 billion to date, and holds roughly US$5 billion in cash reserves, according to FT. This brings Grab’s private valuation to more than US$16 billion.

Grab founder and CEO Anthony Tan is set to own about 2% of the publicly traded company, with Softbank’s Vision Fund, one of Grab’s main investors, also expecting a large payday.

It was first reported by The Wall Street Journal in March 2021 that the company was in talks to merge with Altimeter for a valuation of up to US$40 billion.

The report also stated that Grab could potentially raise between US$3 billion and US$4 billion in PIPE.

Read also: Are these the best 5 SPACs to invest in?

How to trade or invest in Grab shares

You can trade or invest in the Grab SPAC, Altimeter Growth Corporation, before the merger with us.

You'll also be able to take a position on Grab shares once the merger is complete.

Ready to get started? Open an IG trading account.

What are the benefits of going public via a SPAC?

Many companies choose to go public via a merger with a SPAC as they help to speed up their entry to market.

A SPAC is a non-operating entity that has been established with the sole intention of raising liquidity via an initial public offering (IPO) to acquire an existing private company.

They are also known as blank cheque companies because investors are basically buying into a corporate shell that has been created to purchase an unnamed company within a particular industry. This is tantamount to giving a blank cheque to a SPAC founder.

By not identifying a specific acquisition target, a SPAC can avoid an otherwise lengthy listing, auditing and disclosure process. This approach offers a faster turnaround for sponsors than a traditional private equity fund.

Experts say going public through a SPAC can speed up a company’s market entry by as many as four months.

Another Southeast Asian tech unicorn, online travel platform Traveloka, is also mulling the possibility of a US listing via a SPAC later this year.

Traveloka CEO Ferry Unardi told Bloomberg earlier this year that a SPAC is 'very efficient', and allows the company to list fast 'then focus on execution and growing'.

Recent large SPAC deals include UMW Holdings Corp's US$16 billion merger with a blank-cheque entity funded by American billionaire Alec Gores, and luxury electric vehicle maker Lucid Motors’ US$24 billion deal with one of Brazilian businessman Michael Klein’s SPACs.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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