Warburg Pincus Forming Consortium to Bid for GLPby , , and
Buyout firm seeks partners to bid for $8.5 billion company
Deal would help Warburg Pincus tap demand for logistics space
Warburg Pincus has been speaking with banks and potential bidding partners about an offer for the industrial property owner, which has a market value of about $8.5 billion, the people said. GLP, which has assets in China, Japan, the U.S. and Brazil, has asked for first-round offers by early February, people with knowledge of the matter said previously.
Shares of GLP rose as much as 4.8 percent Thursday, hitting the highest intraday level since June 2015. They were up 3.2 percent to S$2.59 at 9:44 a.m. in Singapore, making GLP the best performer on the benchmark Straits Times Index. A consortium including Chinese buyout firm Hopu Investment Management has also held talks about making an offer for GLP, people with knowledge of the matter said in November.
Purchasing GLP would help Warburg Pincus take advantage of a boom in demand for warehouse space from e-commerce companies like Alibaba Group Holding Ltd. and JD.com Inc. Any transaction would add to at least $8.4 billion of deals that the private equity firm has announced in Asia over the past three years, data compiled by Bloomberg show.
“For investors going long on Asia, logistics offers a direct play into the urbanization story as Asian consumers seek developed-world standard of goods and services,” Priyaranjan Kumar, regional executive director of capital markets at Cushman & Wakefield Inc. in Singapore, said by phone Thursday. “It is not surprising to see likes of Warburg Pincus wanting to take advantage of market dislocations and further strengthen their Asia platform.”
Bidder groups see the support of existing company management as key to the success of their offers, one of the people said. Representatives for Warburg Pincus and GLP declined to comment.
GLP said last month it would conduct a strategic review of options to improve shareholder value after a request from its biggest investor, Singapore sovereign fund GIC Pte. The company’s clients include Adidas AG, French retailer Carrefour SA and luxury-goods giant LVMH Moet Hennessy Louis Vuitton SE, its website shows.
Warburg Pincus has previously invested in e-Shang Redwood Group, which owns a portfolio of logistics properties in China, Japan and South Korea. The U.S. private equity firm is also leading a buyout of ARA Asset Management Ltd. that was announced in November, valuing the Singapore real estate investment firm at S$1.78 billion ($1.2 billion).
In November 2015, Warburg Pincus announced it had completed fundraising for a $12 billion global private equity fund. The firm opened a Singapore office last year led by Managing Director Jeffrey Perlman to seek growth investment opportunities across Southeast Asia.
Warburg Pincus said at the time it has invested in more than 140 Asian companies, including Chinese package delivery firm ZTO Express (Cayman) Inc. and Indian developer Piramal Realty. In August, Warburg Pincus and KKR & Co. led a $550 million round of funding for Indonesian startup Go-Jek, which provides motorcycle rides on demand.