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Clover Health to go public via $3.7 bln deal with Social Capital

Adds details on SPACs, context, share movement

Oct 6 (Reuters) - Insurance startup Clover Health will go public through a merger with blank-check firm Social Capital Hedosophia Holdings Corp III IPOC_u.N in a deal valued at $3.7 billion including debt, the company said on Tuesday.

The combined cash-and-stock deal includes a $100 million investment from venture capitalist Chamath Palihapitiya and $50 million from Hedosophia.

Clover, whose investors include Alphabet Inc GOOGL.O and Sequoia Capital, is expected to receive up to $728 million of the proceeds, with up to $500 million allocated to existing shareholders.

Palihapitiya, who had also helped take Virgin Galactic public last year, is planning to raise a total of $2 billion through initial public offerings for three new blank-check firms.

In September, Opendoor Labs Inc, the home-selling platform backed by SoftBank Group 9984.T, agreed to go public through a merger with another blank-check company backed by Palihapitiya in a deal worth $4.8 billion.

Social Capital Hedosophia Holdings is a partnership between the investment firms of Social Capital and Hedosophia, and was listed earlier this year.

A blank-check company, also known as a special purpose acquisition company, uses capital raised through an initial public offering to buy a private company, usually within two years. The deal then takes the private company public.

Social Capital's shares rose more than 5% in premarket trade.

(Reporting by Ambar Warrick and Niket Nishant in Bengaluru; Editing by Sriraj Kalluvila)

((Ambar.Warrick@thomsonreuters.com; +91-80-6182-2837; Reuters Messaging: ambar.warrick.thomsonreuters.com@reuters.net; Twitter: @AmbarWarrick))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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