Grab delays merger completion to Q4

[SINGAPORE] Singapore's Grab Holdings postponed the expected completion of its merger with a US blank-cheque company as the ride-hailing and food-delivery giant works on a financial audit of the past three years.

The deal, set to be one of the largest-ever mergers with a blank-cheque company, is now expected to be completed in the fourth quarter of this year, the company said in a statement on Wednesday. When announcing the merger in April, Grab expected completion in the third quarter.

Grab is the latest company to be affected by intensifying scrutiny from US financial regulators on deals involving special purpose acquisition vehicles. A SPAC listing boom has pushed the number of pre-deal blank-cheque companies trading on US exchanges to more than 500.

"It's not completely unsurprising to see a delay," said Matthew Kanterman, an analyst with Bloomberg Intelligence. "The audit process can take several quarters, especially if there needs to be back and forth with the SEC over certain accounting decisions and policies."

Grab, Southeast Asia's most valuable startup, is trying to take advantage of the US-led SPAC listing craze even as its business continues to be affected by the coronavirus outbreak.

Consolidated gross merchandise value rose 5.2 per cent to US$3.6 billion in the first quarter, with 49 per cent growth in food delivery helping to offset a decline in ride hailing, Grab said. The financial services segment expanded 17 per cent. The company didn't provide revenue or profit numbers.

Grab said in April it is set to have a market value of about US$40 billion after the combination with Altimeter Growth, the SPAC of Brad Gerstner's Altimeter Capital Management. The combined entity's stock will trade on the Nasdaq under the ticker GRAB after the completion of the deal.

BLOOMBERG