Asia's Biggest Buyout Sees GIC-Backed Firm Get $11.6 Billion
A Chinese consortium has agreed to pay S$16 billion ($11.6 billion) for Global Logistic Properties, the warehouse operator backed by Singapore’s sovereign wealth fund, in Asia’s biggest buyout.
GLP accepted the takeover offer from a management-backed group that includes private equity firms Hillhouse Capital Management and Hopu Investment Management. The group, which also includes founder Ming Mei’s SMG, Bank of China Group Investment and a unit of China Vanke, offered S$3.38 a share, GLP said in a statement to Singapore’s stock exchange.
GLP shares, which were suspended, surged 22% to S$3.29 after trading resumed in Singapore. The offer exceeds the shares’ highest closing price since listing and represents a 64% premium to the price before Singaporean sovereign wealth fund GIC Pte., GLP’s largest shareholder, initiated a strategic review of the company in December.
GIC, which owns about 37% of the company, will vote in favour of the offer, the statement said. However, GIC could accept an unsolicited, higher bid that isn’t matched by the Chinese-led group.
“In view of the premium paid and the low conditionality of the deal, any potential counterbidder will have their work cut out for them,” Justin Tang, a director of global special situations at Religare Capital Markets in Singapore, said in an email.
E-commerce companies such as Alibaba Group Holding Ltd. and JD.com Inc. are driving a boom in demand for warehouse space in Asia. The deal will be the largest private equity buyout of an Asian company by enterprise value, surpassing last year’s takeover of Qihoo 360 Technology Co., data compiled by Bloomberg show. It would be the second-largest logistics deal this year after China Investment Corp. agreed to buy Blackstone Group LP’s European logistics business for €12.25 billion ($13.8 billion) in June.
The winning group edged out a rival consortium led by Warburg Pincus, according to people with knowledge of the matter.
The purchase stands out as Chinese acquirers have pulled back on large deals this year amid regulatory scrutiny from the nation’s leaders, who are seeking to stabilize the yuan and contain financial risks. Before this year, Chinese buyers had been among the most prolific dealmakers in the world. Chinese companies had been in private equity deals valued at about $162 billion over the past three years, with such transactions soaring to a high of $56 billion in 2016, according to data compiled by Bloomberg.
The consortium including Hillhouse Capital and Hopu Investment is raising about $4.65 billion of syndicated financing to back the purchase of GLP, according to people familiar with the matter. Citigroup Inc., Morgan Stanley and Goldman Sachs Group Inc. are among the banks backing the deal, the stock exchange statement said.
Vanke, one of China’s largest developers, said in a separate statement the deal is part of a strategic move to become an “urban service provider.” Shares of Vanke were suspended in Hong Kong and Shenzhen pending the announcement. JPMorgan Chase & Co. advised GLP on the sale, while advisers for the buyers included units of Citigroup, Morgan Stanley and Goldman Sachs, DBS Bank Ltd. and China International Capital Corp. Bank of America Corp. advised GIC.
Shares of GLP have surged more than 75% over the past year, giving it a market value of about S$15.5 billion. It was the best performer on Singapore’s benchmark Straits Times Index on Friday.
The sales process, running since the start of the year, featured bidder complaints that the management group had an advantage from privileged access to information.
In May, representatives of GIC called a GLP team managing the sale into their offices, according to people familiar with the matter. The Singaporean fund instructed the group to be more responsive to bidders’ questions and share information transparently in the auction, the people said, asking not to be identified because the discussions were confidential.