Photographer: Nicky Loh/Bloomberg

Singapore Warehouse Giant Picks Chinese Bidder in $10 Billion Buyout

  • Consortium led by Hillhouse, Hopu edges out Warburg Pincus
  • Buyout group to negotiate definitive terms for warehouse owner

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Global Logistic Properties Ltd., the Singapore warehouse operator pursuing a sale, has picked a Chinese bidder consortium for final talks on a deal valuing the company at about $10 billion, people with knowledge of the matter said.

The investor group, fronted by GLP Chief Executive Officer Ming Mei, edged out a rival consortium led by Warburg Pincus, according to the people. The Chinese consortium, which includes private equity firms Hillhouse Capital Management and Hopu Investment Management, is planning to offer around S$3 per share for GLP and will now negotiate definitive terms for the transaction, the people said, asking not to be identified because the information is private.

GLP shares ended trading Wednesday at S$2.70. The Chinese investor group will seek a commitment from Singapore sovereign fund GIC Pte, which owns about 37 percent of the company, that it will vote in favor of the offer, the people said.

The 3.875 percent notes of GLP due 2025 climbed 1.2 cents on the dollar to 97.1 cents as of 12:30 p.m. local time Thursday, according to Bloomberg-compiled prices, the biggest jump in four weeks.

GLP is nearing the end of a months-long sale process that’s faced bidder complaints that the management group has an advantage with privileged access to information. If an agreement is reached, the purchase of GLP would become the largest-ever 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.

“The market views the possible winner more favorably than the rivals, in the sense that there is continuity, familiarity and less disruption to the business,” Ezien Hoo, a credit analyst at Oversea-Chinese Banking Corp. in Singapore, said Thursday. “Whether the new owner will load GLP with more debt remains to be seen.”

Shares of GLP have surged 43 percent over the past year, giving it a market value of about S$12.7 billion ($9.2 billion). It was the best performer during the period on Singapore’s benchmark Straits Times Index, which gained 11 percent. The company was halted from trading Thursday, pending an announcement.

The investor group plans to take GLP private through a so-called scheme of arrangement, the people with knowledge of the matter said. Compared with other methods of pursuing a takeover in Singapore, using a scheme of arrangement helps ensure that the acquirer ends up with full 100 percent control if enough investors vote in favor of a deal.

China Vanke Co., one of the country’s largest residential developers, is part of the management-backed consortium, according to the people. Ping An Insurance Group Co. of China, which previously held talks about partnering with the Chinese investors, didn’t end up joining the deal, the people said.

Representatives for the Chinese consortium and GLP declined to comment, while Ping An and Warburg Pincus didn’t immediately reply to emailed queries. A representative for Vanke said the company has no information to disclose.

E-Commerce Boom

The Chinese investor group had made a binding offer for GLP by the June 30 deadline, while Warburg Pincus submitted an offer that was conditional on getting access to further detailed information about the business, people with knowledge of the matter said last month. Blackstone Group LP didn’t make a standalone bid, though it will consider buying assets from the winner, the people said at the time.

E-commerce companies such as Alibaba Group Holding Ltd. and JD.com Inc. are driving a boom in demand for warehouse space in Asia. GLP said in December that it hired JPMorgan Chase & Co. to advise on a strategic review requested by GIC, its largest shareholder.

“Warehouses in Asia is a fast-growing sector that attracts a lot of interest,” Greg Hyland, head of capital markets at Jones Lang LaSalle Inc. in Singapore, said by phone Thursday. “There’s a substantial undersupply of modern logistics in China, so we’re seeing a lot of growth there.”

— With assistance by David Yong, Emma Dong, and Dingmin Zhang

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