Grab plays down GoTo deal, says no talks ‘at this time'
SOUTH-EAST ASIA (Bloomberg): Grab Holdings Ltd. said it isn't in talks to acquire GoTo Group "at this time,' signaling it's halting or at least pausing a planned US$7 billion acquisition of its South-East Asia internet peer.
"The parties are not involved in any discussions at this time and Grab has not entered into any definitive agreements,' Grab said in a statement Monday.
"Indonesia continues to be an important country in serving our mission as we continue to outserve our Indonesian customers, driver- and merchant-partners.'
Singapore's Grab and Indonesia's GoTo had made headway on a potential deal structure, but the pace of talks had slowed recently over concerns about potential regulatory demands, Bloomberg News reported previously.
Indonesia's antitrust agency said in May it would look into potential risks and urged the companies to ensure any deal won't create a monopoly.
Shares of Grab declined 1% in pre-market trading. The stock has advanced 41% in the past 12 months as Grab's profitability improved, but remains down more than 50% since its listing in New York through a merger with a blank-check firm in late 2021.
Grab, which is backed by Uber Technologies Inc., has held on-and-off talks with GoTo for years. But a merger never materialised, partly because of antitrust concerns likely to arise from combining Southeast Asia's two dominant ride-hailing and food-delivery companies.
Uber left the region in 2018 in exchange for a stake in Grab, and smaller competitors haven't eaten significantly into Grab and GoTo's market share in Indonesia and Singapore.
Indonesia's sovereign wealth fund Danantara has been considering a role in the combination, possibly helping to assuage concerns in the government resulting from the sale of the national tech champion, Bloomberg News reported last week.
A potential sale of GoTo has sparked worries among Indonesia's political leadership about the loss of independence and developer and engineer jobs. Some have also expressed concerns that ride-hailing and food-delivery prices would rise if Grab becomes dominant in a tough economy where consumers are already facing hardship.
Grab, the largest of South-East Asia's ride-hailing and delivery firms, has been locked in fierce competition with GoTo for almost a decade across the region. The Singaporean company is the leading provider in its home market and countries including Malaysia and Thailand.
While the companies' rivalry has weighed on their efforts to reach consistent profitability, they have benefited from user growth in the emerging economies they operate in. On-demand transactions - including meal delivery - grew 19% in the two-month period covering April and May, versus a year earlier, Grab said in a separate release Monday.
GoTo has pulled out from countries including Thailand and Vietnam after a fierce cost-cutting drive, but remains a formidable player in Indonesia - the region's biggest market. Acquiring GoTo would give Grab a stronger position in the country of more than 275 million.
"We will continue to maintain a high hurdle rate when deploying our capital, and will have a balanced approach to investing for organic, profitable growth, and be highly selective on inorganic opportunities, in line with our capital allocation framework,' Grab said in its statement.
-- ©2025 Bloomberg L.P.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
11 minutes ago
- The Star
Firms keen to list on SGX
SINGAPORE: Interest from Singapore firms to list on the local bourse via initial public offerings (IPOs) and reverse takeovers (RTOs) has been returning ahead of a US$5bil capital injection that is expected to help revive the local stock market. 'We are currently working on several listings, including the Yangzijiang Maritime spin-off and the proposed RTO involving Sincap and Skylink Apac, both expected to list on the Singapore Exchange (SGX) within the year,' Ong Hwee Li, chief executive of corporate finance firm SAC Capital, told The Straits Times. This follows April announcements by SGX-listed Yangzijiang Financial to spin off its maritime investments into a separately listed company, and by Sincap Group to acquire vehicle leasing firm Skylink for S$42.3mil via an RTO, paving the way for Skylink to become publicly listed. SAC Capital is also advising 'two to three' local IPO aspirants in sectors including events management, real estate management and natural resources. These firms expect to list on SGX in 2026. 'We are receiving more listing inquiries, about one to two per month, from companies in other industries like construction, food and beverage, technology, and financing sectors, highlighting renewed interest in IPOs,' Ong said. He added that SAC Capital's IPO pipeline is now full, with much stronger investor interest in book building compared with 2024. Book building is a stage in the IPO process where investors bid for the number of shares they want at certain price points, which helps corporate advisers gauge demand for a company's shares and how to price them before they are listed on the stock exchange. These developments are being fuelled by a central bank-led programme to allocate US$5bil in seed capital to Singapore-based funds for investing in local stocks which are not on the benchmark Straits Times Index (STI). The STI tracks the performance of the top 30 largest and most liquid companies listed on SGX. Announced in February as part of a string of measures to revive the Singapore stock market, the programme has received positive interest from global fund managers. Suitable investment strategies will be shortlisted by end-September, the Monetary Authority of Singapore has said. Analysts reckon the funds will likely be deployed before the end of 2025. Listing interest has gained momentum as a result. On June 6, Bloomberg reported that Hong Kong-based Link-REIT is considering listing a real estate investment trust (REIT) in Singapore that would include some of its properties outside of China and Hong Kong, while Japan's Nippon Telegraph and Telephone in its earnings release in May said it plans to list its data centre REIT on the SGX. In May, Reuters reported that at least five companies from mainland China or Hong Kong are planning IPOs, dual listings, or share placements in Singapore in the next 12 to 18 months. The companies include a Chinese energy company, a Chinese healthcare group, and a Shanghai-based biotech group. In April, LHN Group announced plans to take its co-living business Coliwoo Group public on the SGX. The real estate management services group, dual-listed in Singapore and Hong Kong, said it has submitted applications in both places for the proposed spin-off and separate listing of the shares of Coliwoo on the mainboard of SGX. In January, Centurion Corp said in a bourse filing that it is exploring the establishment of a REIT involving some of its worker and student accommodation assets that it plans to list on the SGX main board. US data security firm AvePoint, which trades on Nasdaq, in January also filed for a secondary listing in Singapore. If they take place, these listings will give the SGX a much-needed boost after the bourse saw just four IPOs in 2024, a record low. The bourse has hosted just one notable IPO in 2025, that of automotive group Vin's Holdings, which is now trading at 29 US cents, close to its IPO price of 30 US cents. Key to their success is how the shares are traded post-listing, Ong said, noting that many IPOs, particularly on Catalist, are too small and have controlled floats, where a company limits the number of shares available for public trading. While a limited float may initially create strong demand and price momentum, it also means there is little market depth to absorb selling pressure once investor sentiment shifts. Ong noted that SAC Capital encourages retail participation in the IPOs it manages by offering automated teller machine (ATM) tranches, which allows retail investors to apply for shares directly through their bank ATMs. He added that retail investors who receive shares through the ATM tranche tend to trade more actively, contributing to a more diversified and engaged shareholder base post-listing. — The Straits Times/ANN
The Star
11 minutes ago
- The Star
Hedge funds face California rebuke over role in wildfires claims
Hedge funds buying these claims from insurers are now under attack from the California Earthquake Authority, which is the administrator of the California Wildfire Fund. — Bloomberg LOS ANGELES: Hedge funds are facing pushback in California as their bets tied to insurance claims stemming from the Los Angeles wildfires are attacked as unethical. The transactions in focus are tied to so-called subrogation claims, which hedge funds, private equity firms and other alternative investment managers have been buying from insurers over the past few months. Subrogation kicks in if a third party such as a utility is suspected of being responsible for losses covered by insurers. Hedge funds buying these claims from insurers are now under attack from the California Earthquake Authority, which is the administrator of the California Wildfire Fund. It has described such transactions as 'opportunistic, profit-driven investment speculation' and said it's planning to take on 'hedge funds and other speculators' that it claims 'are actively seeking to profit from California's devastating wildfire catastrophes'. In practice, that means the authority will try to block the payout of what it said could end up being 'billions of dollars' to the investors that bought the claims, according to materials prepared ahead of a meeting that took place last month with the California Catastrophe Response Council, which oversees the fund. To that end, it plans to engage California's state legislature, according to a transcript of comments made during the meeting and seen by Bloomberg. A spokesperson for the authority declined to comment. Bradley Max, a director at Cherokee Acquisition, a New York-based investment bank that trades and invests in subrogation claims, said the development has 'put a chill on bidding', which is already visible in pricing. Subrogation rights tied to the Eaton Fire that ripped through Southern California in January were trading as high as 50 US cents on the dollar at one point, but have now dropped 'at least a few points lower', Max said. Even though the political development has led to lower prices on the subrogation claims, it hasn't held back transactions. Cherokee said in April it had brokered deals linked to the Los Angeles fires for 'larger, more sophisticated distressed debt hedge funds'. And by April 15, there had 'been at least 10 transactions, to date, totalling more than US$1bil worth of recovery rights between Eaton and Palisades' fires, investment bank Oppenheimer & Co Inc's co-head of special assets, Ronald Ryder, told the California Earthquake Authority. On April 17, Oppenheimer 'successfully traded' over US$125mil in claims in just one day, Ryder added. A spokesperson for Oppenheimer declined to comment. Cherokee didn't name the hedge funds for which it brokered deals. In an email to the California Earthquake Authority, Ryder said that as catastrophic weather events become 'more prevalent', insurers are increasingly resorting to 'recovery subrogation in the secondary market to fortify the balance sheet'. There's a growing consensus that insurers can't cover the rising costs of weather-related catastrophes alone, especially as climate change fuels more extreme events. — Bloomberg
The Star
11 minutes ago
- The Star
Grab eyes US$1.25bil bond sale for acquisitions
Aside from possible acquisitions, Grab said it plans some share buybacks. — Bloomberg HONG KONG: Grab Holdings is planning a US$1.25bil sale of bonds convertible into stock, partly to bulk up its warchest for acquisitions amid signs that talks to take over Gojek parent GoTo Group have stalled. Singapore-based Grab, whose app is ubiquitous in South-East Asia for ride hailing and food delivery, will issue convertible bonds that mature on June 15, 2030, it said in a statement on June 9. The securities will carry a coupon of as much as 0.5% a year, payable semiannually, according to terms of the deal seen by Bloomberg News. Aside from possible acquisitions, Grab said it plans some share buybacks – the company has US$274mil remaining under its share-repurchase programme as of the end of March. The bonds will be redeemable, under certain conditions, from mid- 2028. Grab's offering is the largest Asian convertible-bond deal denominated in US dollars since Ping An's US$3.5bil deal in July 2024, and the biggest by a non-Chinese company since South Korean chipmaker SK Hynix's US$1.7bil issuance in 2023. Ping An last week also issued convertible bonds worth US$1.5bil, denominated in Hong Kong dollars. As for the GoTo acquisition, Grab on June 9 signalled that it was halting or at least pausing a planned US$7bil acquisition. The pair of ride-hailing and food-delivery companies have held on-and-off talks for years but a combination never materialised, partly because of antitrust concerns likely to arise from combining the two dominant players in South-east Asia. 'The parties are not involved in any discussions at this time and Grab has not entered into any definitive agreements,' Grab said in a statement. 'Indonesia continues to be an important country in serving our mission as we continue to outserve our Indonesian customers, driver and merchant-partners.' Grab's stock has advanced 41% in the past 12 months as Grab's profitability improved, but remains down more than 50% since its listing in New York through a merger with a blank-cheque firm in late 2021. Indonesia's antitrust agency said in May it would look into potential risks and urged the companies to ensure any deal will not create a monopoly. Indonesia's sovereign wealth fund Danantara has been considering a role in the combination, possibly helping to assuage concerns in the government resulting from the sale of the national tech champion, Bloomberg News reported last week. A potential sale of GoTo has sparked worries among Indonesia's political leadership about the loss of independence and developer and engineer jobs. Some have also expressed concerns that ride-hailing and food-delivery prices would rise if Grab becomes dominant in a tough economy where consumers are already facing hardship. Grab, the largest of South-East Asia's ride-hailing and delivery firms, has been locked in fierce competition with GoTo for almost a decade. The Singapore-based company is the leading provider in its home market and countries including Malaysia and Thailand. While the rivalry has weighed on its efforts to reach consistent profitability, it has benefited from user growth in the emerging economies it operates in. On-demand transactions – including meal delivery – grew 19% in the two-month period covering April and May, versus a year earlier, Grab said in a separate release on June 19. — Bloomberg
