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After months of negotiations, the competition to acquire Singapore-based Global Logistic Properties (GLP) is expected to narrow down to two groups – a Chinese consortium supported by the acquiree’s management and a rival party led by Warburg Pincus.
“The management group and Warburg Pincus are the most serious bidders. Some other parties are keen on picking up specific assets and not the entire company,” a source told Reuters.
In particular, the former consists of Chinese private equity firms Hillhouse Capital Group and Hopu Investment Management. Insiders revealed that this party has also brought in co-investors like Ping An Insurance Group and real estate developer China Vanke.
On the other hand, the rival party comprises American private equity firm Warburg Pincus and its logistics partner in Asia, e-Shang Redwood.
The Financial Times previously reported that most of GLP’s would-be bidders were dropping out as it would be pointless to submit a bid considering that other parties have insider advantage, while some of the bidders have existing business ties with the acquiree.
For instance, the Chinese consortium is backed by GLP’s Chief Executive Ming Mei. Hopu’s founder Fang Fenglei is a GLP board member, and the private equity firm partly owns the acquiree’s business in China.
There were also transparency issues in the process, alleged some potential bidders, as it took too long to get requested documents from GLP.
This has led to complaints reaching the ear of Singapore’s sovereign wealth fund GIC, which owns a 37 percent stake in GLP. Nonetheless, the acquiree announced last week that it had taken measures to address these problems.
But sources said other would-be bidders like Asian buyout firm RRJ Capital and Blackstone Group are not expected to submit individual bids.
The successful purchase of GLP, which has a market capitalization of US$10 billion (S$13.77 billion), offers a chance to take control of Asia’s largest warehouse landlord. Not only does it count Amazon among its customers, the new owner will also benefit from the growing demand for logistics properties amidst the flourishing e-commerce sector.
Overall, GLP owns and manages a US$41 billion (S$56.47 billion) portfolio of industrial facilities across Japan, Brazil, the United States and China, from which it derives two-thirds of its revenue.
This article was edited by Denise Djong.
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