Global Logistic Properties, the Singapore warehouse operator pursuing a sale, has picked a Chinese bidder consortium for final talks on a deal valuing the company at about US$10 billion (S$13.8 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 $3 a share for GLP and will now negotiate definitive terms for the deal, the people said, asking not to be identified because the information is private.
GLP shares ended trading on Wednesday at $2.70.
Under the deal being contemplated, GLP would be taken private through a scheme of arrangement, the people said.
The Chinese investor group will seek to obtain an undertaking from Singapore sovereign fund GIC, which owns about 37 per cent of the company, to vote in favour of the offer, the people said.
The 3.875 per cent notes of GLP due in 2025 climbed 1.2 cents on the dollar to 97.1 cents as of 12.30pm local time yesterday, according to Bloomberg-compiled prices, the biggest jump in four weeks.
GLP is nearing the end of a months-long sale process that has 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 private equity buyout of an Asian company by enterprise value, surpassing last year's takeover of Qihoo 360 Technology, data compiled by Bloomberg show.
"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," Mr Ezien Hoo, a credit analyst at Oversea-Chinese Banking Corp said. "Whether the new owner will load GLP with more debt remains to be seen."
Shares of GLP have surged 43 per cent over the past year, giving it a market value of about $12.7 billion. It was the best performer during the period on Singapore's benchmark Straits Times Index, which gained 11 per cent.
The company was halted from trading its stock yesterday, pending an announcement.
China Vanke, one of the country's largest residential developers, is a member of the management- backed consortium, according to the people.
Ping An Insurance Group of China, which previously held talks about partnering with the Chinese investors, did not end up joining the deal, the people said.
E-commerce companies such as Alibaba Group Holding and JD.com are driving a boom in demand for warehouse space in Asia.
"Warehouses in Asia is a fast- growing sector that attracts a lot of interest," Mr Greg Hyland, head of capital markets at Jones Lang LaSalle, said.
"There's a substantial undersupply of modern logistics in China, so we are seeing a lot of growth there."