Merging company

Pegasus Asia, SPAC backed by Tikehau Capital, makes its debut in Singapore

A man wearing a protective face mask walks past the Singapore Stock Exchange (SGX) which remains open during ‘circuit breaker’ measures to curb the coronavirus COVID-19) in Singapore’s central business district, April 7, 2020. REUTERS/Edgar Su

Join now for FREE unlimited access to Reuters.com

Register

SINGAPORE, Jan 21 (Reuters) – A special purpose acquisition company (SPAC), backed by European asset manager Tikehau Capital (TKOO.PA) and a holding company of LVMH chairman Bernard Arnault, has become the second SPAC to list in Singapore on Friday as Asian investors turn to blank check companies.

The twin listings also mark the first major launch for these vehicles in Asia since a SPAC frenzy in the United States in early 2021 before regulatory changes and some lackluster returns dampened investor sentiment. Read more

On Thursday, Vertex Technology Acquisition Corp, a SPAC backed by Vertex Holdings – in turn owned by public investor Temasek (TEM.UL) – became the first such structure to list on the local stock exchange. Read more

Join now for FREE unlimited access to Reuters.com

Register

Pegasus Asia, sponsored by Tikehau Capital and Financière Agache, Arnault’s holding company, has raised S$170 million ($126 million) and plans to invest in technology sectors.

SPAC, which was heavily oversubscribed, was little changed from its offer price of S$5 per unit in afternoon trading.

SPACs raise money in IPOs and then seek to merge with a private company, aiming to take on the target audience in a shorter time frame than in a traditional listing and at stronger valuations.

“We will immediately focus on finding suitable targets for the business combination,” Pegasus Asia CEO Neil Parekh said at a listing ceremony.

In September, the Singapore Stock Exchange relaxed proposed rules in response to market feedback, allowing SPACs or shell companies to list in the city-state. Read more

A$150 million SPAC sponsored by Southeast Asian industrial and technology buyout fund Novo Tellus Capital Partners, which has secured investments from a Temasek unit, among others, lists next week.

Hong Kong also allows SPAC registrations from this year, but prohibits the participation of retail investors. Read more

Southeast Asia is seeing a boom in start-up funding as investors bet on post-pandemic technologies.

“Many private companies want to be with a partner who can not only bring capital but also give them visibility and help them grow as businesses,” Parekh told Reuters on Thursday.

Pegasus Asia sponsors also include former UniCredit boss Jean Pierre Mustier and banker Diego De Giorgi. The group of sponsors already has two SPACs listed in Europe.

“We were very confident that we didn’t have to hunt for cornerstones because we see ourselves as top-tier investors,” said Parekh, a seasoned banker.

“We have an important skin in the game,” he added, referring to the 30 million Singapore dollars invested by the sponsors and the unconditional commitment of Tikehau and Financière Agache to invest an additional 40 million Singapore dollars. in total when the SPAC merges with a target.

SGX offers a regulatory framework similar to that of the United States, notably allowing the participation of retail investors, but also requiring sponsors to invest in SPACs.

Analysts say risks include SPACs overvaluing companies and failing to find ideal targets.

Citigroup and UBS are joint issue managers and global coordinators on the Pegasus SPAC.

($1 = 1.3468 Singapore dollars)

($1 = 0.8830 euros)

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Anshuman Daga; edited by Richard Pullin

Our standards: The Thomson Reuters Trust Principles.