Pegasus Asia, Tikehau Capital-backed SPAC, debuts in Singapore

SINGAPORE (Jan 21): A special purpose acquisition company (SPAC), backed by European asset manager Tikehau Capital and a holding firm of LVMH chairman Bernard Arnault, on Friday (Jan 21) became the second SPAC to list in Singapore as Asia investors warm to blank check firms.

The twin listings also mark the first major debut of such vehicles in Asia since a SPAC frenzy in the US in early 2021 prior to regulatory changes and some poor returns that dampened investor sentiment.

On Thursday, Vertex Technology Acquisition Corp, a SPAC backed by Vertex Holdings (in turn owned by state investor Temasek) became the first such structure to list on the local bourse.

Pegasus Asia, sponsored by Tikehau Capital and Financiere Agache, Arnault’s holding firm, raised S$170 million (US$126 million or about RM528.45 million) and plans to invest in tech-enabled sectors.

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

SPACs raise money in initial public offerings, then look to merge with a private company, aiming to take the target public in a shorter time frame than in a traditional listing and with stronger valuations.

“We will immediately focus on seeking suitable targets for the business combination,” Pegasus Asia chief executive officer Neil Parekh said at the listing ceremony.

In September, Singapore Exchange (SGX) eased proposed rules in response to market feedback, allowing SPACs or shell firms to list in the city state.

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

Hong Kong is also allowing SPAC listings from this year but bars participation by retail investors.

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

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

Pegasus Asia’s sponsors also include former UniCredit boss Jean Pierre Mustier and banker Diego De Giorgi. The group of sponsors already have two European-listed SPACs.

“We felt very confident not having to look around for cornerstones because we see ourselves as cornerstone investors,” said Parekh, a veteran banker.

“We have significant skin in the game,” he added, referring to S$30 million invested by the sponsors and an unconditional commitment by Tikehau and Financiere Agache to invest an additional S$40 million in total when the SPAC merges with a target.

SGX is offering a regulatory framework similar to that in the US, including allowing the participation of retail investors but also requires sponsors to invest in SPACs.

Analysts said risks include SPACs overvaluing companies and not finding ideal targets.

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