Altimeter Growth (NASDAQ:AGC) is set to merge with Grab in what the Singapore ride-hailing service said is expected to be the largest-ever U.S. equity offering by a Southeast Asian company. AGC stock is up 7.53% in pre-market trading on Tuesday following the announcement.
The news clarified some confusion around Altimeter as the blank-check company has two special purpose acquisition companies out on the hunt for merger targets. Shares of Altimeter Growth 2 (NYSE:AGCB) are unchanged.
The news was probably the SPAC world’s worst-kept secret of late. Last month, The Wall Street Journal reported that the Singaporean company was in talks to come public via one of the Altimeter Growth SPACs.
The proposed deal would put an expected equity value on a pro-forma basis of approximately $39.6 billion and is expected to provide up to approximately $4.5 billion in cash proceeds to Grab. Proceeds include more than $4 billion of fully committed PIPE led by $750 million from funds managed by Altimeter Capital Management, LP.
3-Year Lock-Up for Some AGC Stock
Altimeter committed to a three-year lock-up period for its sponsor-promote shares of AGC stock, 10% of which will go to the recently announced GrabForGood Fund to support programs with long-term social and environmental impact.
In the merger, AGC investors are tapping into the ride-hailing market in a big way. Rivaling the likes of Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT), Grab has taken its services to 30 cities in Malaysia, Philippines, India, Thailand, Singapore, Vietnam and Indonesia. And beyond ride-hailing, it also offers food and grocery delivery. Since its founding in 2012, it has grown to become the most valuable startup in Singapore.
The decision to come public via a SPAC rather than traditional initial public offering comes in the wake of the market debut flop for Deliveroo, another hotly anticipated investment. Last month the biggest U.K. listing in more than 10 years plunged as much as 31% after it started trading.
SPACs have been rising in popularity of late with more companies choosing them as their means to enter the public market. That includes Innoviz (NASDAQ:INVZ) completing a merger with Collective Growth and Topps planning to go public through Mudrick (NASDAQ:MUDS).
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News, McKinsey & Co. and McDonald & Company Investments.