Warburg Pincus said to be forming consortium to bid for GLP

The logo of Global Logistic Properties Ltd. is displayed during the company's listing ceremony at the Singapore Exchange, in Singapore, on Oct 18, 2010.
The logo of Global Logistic Properties Ltd. is displayed during the company's listing ceremony at the Singapore Exchange, in Singapore, on Oct 18, 2010. PHOTO: BLOOMBERG

HONG KONG (BLOOMBERG) - Warburg Pincus is forming a consortium to bid for Global Logistic Properties, the Singapore-based warehouse operator, according to people with knowledge of the matter.

Blackstone Group is also considering an offer for GLP, potentially pitting it against Warburg Pincus and a separate Chinese group in the bidding for the US$8.7 billion (S$12.1 billion) warehouse operator, people with knowledge of the matter said.

Warburg Pincus has been speaking with banks and potential bidding partners about an offer for the industrial property owner. GLP, which has assets in China, Japan, the United States 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 per cent Thursday, hitting the highest intraday level since June 2015. They were up 3.2 per cent 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 and JD.com. Any transaction would add to at least US$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 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 wealth fund GIC. The company's clients include Adidas, French retailer Carrefour 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 US private equity firm is also leading a buyout of ARA Asset Management that was announced in November, valuing the Singapore real estate investment firm at S$1.78 billion ($1.2 billion).