Singapore-headquartered super app Grab Holdings Ltd announced plans for a $1.25 billion sale of bonds convertible into stock, fuelling speculation it’s bulking up its war chest to take over rival Southeast Asian delivery-and-transport provider GoTo Group, Bloomberg reported on Tuesday.

Grab said it will issue convertible bonds that mature in June 2030, partly to fund potential acquisitions.

Though Grab issued a separate statement on Monday saying it was not currently in talks to buy GoTo, the bond sale sparked optimism about the prospects of combining the two dominant ride-hailing and food-delivery companies in the region, the report said.

The pair have held on-and-off talks for years but a combination never materialized, partly because of antitrust concerns likely to arise from such a merger, according to the report.

The securities will carry a coupon of zero to 0.5 percent a year, payable semiannually, and a conversion premium of about 35 percent to 40 percent to the stock’s closing price on Tuesday, according to terms of the deal seen by Bloomberg.

Aside from possible acquisitions, Grab said it plans some share buybacks, which could facilitate initial hedges by investors in the deal, terms of the deal showed.

The company had $274 million remaining under its share-repurchase program as of the end of March. The bonds will be redeemable, under certain conditions, from mid-2028.

Grab joins the flurry of sales of bonds that can be swapped into stock by Asian companies this year. That’s particularly been the case with Chinese firms as issuers from Baidu Inc to Ping An Insurance Group Co of China announced sizeable deals in recent months, according to Bloomberg.

Grab’s offering is the largest Asian convertible-bond deal denominated in US dollars since Ping An’s $3.5 billion deal in July 2024, and the biggest by a non-Chinese firm since Korean chipmaker SK Hynix Inc’s $1.7 billion issuance in 2023. Ping An last week also issued convertible bonds worth $1.5 billion, denominated in Hong Kong dollars.

Morgan Stanley, HSBC Holdings plc and JPMorgan Chase & Co are joint global coordinators of the deal, according to the report.

NASDAQ-listed Grab denies reports of talks with Indonesia’s GoTo for a potential deal