Grab Stock Rises Premarket On Indonesian Wealth Fund's Rumored Role In Potential Goto Merger - Retail Concerned About Dilution

Grab Holdings (GRAB) stock garnered retail attention on Friday after Bloomberg reported that Indonesia's sovereign wealth fund, Danantara, is exploring buying a stake in the company if it merges with rival GoTo.

Bloomberg News reported, citing people familiar with the matter, that Danantara has held preliminary talks with GoTo to acquire a minority stake in a combined entity. 

The deal could help ease Indonesian government's concerns over the sale of the local firm GoTo to Singapore's food delivery and ride-hailing firm Grab.

The report added that Grab and GoTo have made progress on a potential deal structure, but concerns about possible regulatory demands have led to a slowdown in deal talks.

GoTo's talks with Danantara may not lead to a deal eventually, the report said. It was also not clear if the wealth fund had held discussions with Grab.

While smaller competitors have eaten into the market shares of Grab and GoTo, the combined company could control well over 80% of Indonesia's on-demand services market, according to Citi analysts.

Bloomberg reported that one scenario under discussion involves GoTo first acquiring Grab's Indonesian ride-hailing and food delivery business.

Later, Grab would buy a majority stake in this combination, allowing it to run GoTo's operations in Indonesia, as per the report, and GoTo would sell its ride-hailing business in Singapore to another buyer.

Bloomberg had reported the deal could be valued at $7 billion.

Retail sentiment on Stocktwits was bearish 'extremely bullish' (42/100) territory, while retail chatter remained 'normal.'

Investors wondered whether the merger would result in share dilution.

Grab stock has risen 7% this year.

The company's Indonesia business posted a 6.3% rise in revenue to $643 million in 2024.

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