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Sources have revealed that American private equity firm Warburg Pincus is creating a consortium to bid for industrial landlord Global Logistic Properties (GLP), reported Bloomberg.
According to those privy to this information, Warburg Pincus has been talking to lenders and potential partners regarding an offer for the Singapore-based warehouse operator, which has a market capitalisation of around US$8.5 billion (S$12.13 billion), after GLP called for first-round offers by early February.
On Thursday (12 January), its share price increased by up to 4.8 percent, reaching its highest intraday level since June 2015. As of 9:44 am yesterday, it rose 3.2 percent to S$2.59, making GLP the top performer on the Straits Times Index.
An acquisition by Warburg Pincus would help it leverage on the soaring demand for warehouse space by e-commerce firms like Alibaba, as GLP has properties in Japan, China, Brazil and the US. Its customers also include Adidas, French retailer Carrefour and LVMH Moet Hennessy Louis Vuitton, a global leader in luxury goods.
“For investors going long on Asia, logistics offers a direct play into the urbanisation story as Asian consumers seek developed-world standard of goods and services,” said Priyaranjan Kumar, Cushman & Wakefield’s Regional Executive Director of Capital Markets.
“It is not surprising to see the likes of Warburg Pincus wanting to take advantage of market dislocations and further strengthen their Asia platform,” he added.
Previously, the company had invested in e-Shang Redwood Group, which owns logistics real estate in Japan, China and South Korea. The private equity firm also announced last November that it was leading a consortium to purchase ARA Asset Management for around S$1.78 billion.
Last month, GLP announced that it hired JPMorgan Chase & Co. to aid in the strategic review of options to boost shareholder value, at the behest of its largest shareholder GIC. While it has created a special committee consisting of four independent directors to take charge of the matter, there’s no certainty it would result in a deal. GIC, which oversees Singapore’s foreign reserves, has a 37 percent stake in GLP.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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