Singapore-listed Global Logistic Properties (GLP) has received a blockbuster takeover offer from a Chinese consortium - valuing the GIC-backed warehouse operator at a cool $16 billion.
This would be the largest private equity buyout of an Asian company should the deal go through.
Singapore sovereign wealth fund GIC, which owns a 36.84 per cent stake in GLP, could reap a profit of about $3.4 billion, including dividends, from the deal.
The consortium, Nesta Investment Holdings, has offered $3.38 per share for GLP, with the intention of delisting and privatising the firm, the two parties said yesterday.
The move is a boon for investors. The counter surged by 59 cents to an all-time high of $3.29 yesterday after trading resumed following the announcement. Nesta, where GLP chief executive Ming Z. Mei is a board director, is owned by Hopu Logistics Investment Management, Hillhouse Capital Logistics Management, SMG Eastern, Bank of China Group Investment and Vanke Real Estate (Hong Kong).
GLP accepted the proposal following extensive evaluation. It "is compelling and value-enhancing for all shareholders", said GLP chairman Seek Ngee Huat.
GLP owns and runs a US$41 billion (S$56 billion) portfolio of 55 million sq m of warehouses and other logistics facilities in China, Japan, the United States and Brazil.
It has agreed to support the bid, being done by way of a scheme of arrangement - a different means of takeover. But it can accept an unsolicited, higher competing bid if one comes in - not matched by Nesta. This "soft" undertaking will maximise shareholder value and is a good move to protect retail investors, market observers said.
The offer price of $3.38 per share is 25 per cent higher than the last traded price of $2.70 on Wednesday before trading was suspended, and beats GLP's highest closing price by 8 per cent since it was listed in October 2010. It is also a massive 67 per cent premium to the one-month average price up to Nov 30 last year, the last trading day before the strategic review was announced. GLP undertook the review last December, following a request by GIC, to look at ways to boost shareholder value.
GLP did not reveal other bidders, which reportedly included private equity firm Warburg Pincus.
Analysts were upbeat on the takeover bid, set to benefit from the robust domestic consumption in China and firm demand for modern logistics facilities.
Mr Justin Tang, a director at Religare Capital Markets, said: "This is a stellar outcome... The offer is at the very top end of recent property privatisation transaction multiples."
Subject to shareholders' approval and the meeting of other conditions, the buyout is expected to be completed by mid-April next year.