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Insiders revealed that Singapore-listed Global Logistic Properties (GLP) has finally chosen a bidder for the final buyout negotiations, reported Bloomberg.
According to people privy to the deal, the warehouse operator picked a Chinese consortium backed by GLP’s Chief Executive Ming Mei, instead of a rival party led by US private equity firm Warburg Pincus.
“The market views the possible winner more favourably than the rivals, in the sense that there is continuity, familiarity and less disruption to the business,” said OCBC Credit Analyst Ezien Hoo.
The selected bidder intends to offer SGD3 for each GLP share, valuing the company at around USD10 billion. If the deal proceeds, it will be the biggest private equity acquisition of an Asian firm, based on data compiled by Bloomberg.
Before the trading of GLP shares was halted on Thursday, its stock price reached SGD2.70 on Wednesday. Last year, its shares soared by 43 percent, valuing the firm at approximately SGD12.7 billion (USD9.2 billion). It was the best performer stock during the period on the Straits Times Index, which rose by only 11 percent.
The Chinese consortium includes private equity firms Hopu Investment Management, Hillhouse Capital Management and China Vanke, one of China’s biggest home builder. Ping An Insurance Group was initially interested in joining the party, but it dropped out.
Now, the investor group will hold the talks regarding the definitive terms of the buyout. It will also seek a pledge from Singapore sovereign fund GIC, which holds a 37 percent stake in GLP, that it will consent to the transaction.
Basically, the Chinese consortium plans to privatise the warehouse operator via a scheme of arrangement, which helps ensure that the buyer will take full control of the company if enough stakeholders accept the offer.
Furthermore, GLP’s new owner would benefit from the growing demand for warehouse space amidst the flourishing e-commerce scene.
“Warehouses in Asia is a fast-growing sector that attracts a lot of interest. There’s a substantial undersupply of modern logistics in China, so we’re seeing a lot of growth there,” added JLL’s Head of capital markets Greg Hyland.
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