Grab Is in Talks to Go Public Through a SPAC Merger

Grab Holdings Inc. is in talks to go public through a merger with a SPAC that could value the Southeast Asian ride-hailing startup at as much as $40 billion, making it by far the largest such deal on record.

The Singapore company is discussing a deal with a special-purpose acquisition company affiliated with Altimeter Capital Management LP that would value it at between $35 billion and $40 billion, according to people familiar with the matter. (Altimeter has two SPACS; it couldn’t be learned which one is in talks with Grab.)

As part of the deal, Grab would raise between $3 billion and $4 billion in a so-called PIPE, a funding round that typically accompanies a SPAC merger, the people said. That amount could still change as Grab and Altimeter will start meeting with mutual funds and other potential investors soon, some of the people said.

The parties could announce the deal in the next few weeks, though the talks could still fall apart and Grab could revert to an earlier plan to stage a traditional IPO on a U.S. exchange this year.

Should they move forward with a SPAC deal, it would be the high water mark in a recent explosion of such transactions, in which an empty shell raises money in an initial public offering with plans to later find one or more companies to merge with. In some cases the SPAC ends up with only a small sliver of the newly public target.

So far this year, a record $70 billion-plus has been raised for SPACs, which account for more than 70% of all public stock sales, according to Dealogic. A slew of companies are in talks for a SPAC merger or already have agreed to one including office-sharing firm WeWork, online photo-book maker Shutterfly Inc. and online lender Social Finance Inc.

In addition to ride-hailing, Grab, founded in 2011, delivers grocery and other items and provides digital financial services to merchants.

Its backers include SoftBank Group Corp. , Uber Technologies Inc. and Toyota Motor Corp. It was last publicly valued at around $15 billion in a fundraising round in October 2019, according to PitchBook.

Altimeter’s SPACs— Altimeter Growth Corp. and Altimeter Growth Corp.—raised $450 million and $400 million in October and January IPOs, respectively. Altimeter Capital, of Menlo Park, Calif., has around $16 billion under management and primarily invests in technology companies.

The firm has racked up a string of successful investments and was one of the main participants in a January round of funding Roblox Corp. raised ahead of its IPO at $45 a share. In its debut Wednesday, shares of the videogame platform traded more than 50% above that level and continued rising Thursday morning.

Japan’s SoftBank, which invested through its Vision Fund, also is poised to win big on Grab.

Private companies are flooding to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and gain a public listing. WSJ explains why some critics say investing in these so-called blank-check companies isn’t worth the risk. Illustration: Zoë Soriano/WSJ

Write to Maureen Farrell at maureen.farrell@wsj.com

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