Global Logistic Properties (GLP) has confirmed it has accepted a takeover offer by a Chinese consortium, known as Nesta Investment Holdings, that values the Singapore company at SGD16bn (€10.2bn).
In what is the single largest takeover deal in Asia this year, the consortium led by GLP chief executive Ming Mei, appears to have won the race to buy the company, offering SGD3.38 in cash per security.
The company said the proposed privatisation will be made through a scheme of arrangement, which has to be approved by at least 50% of shareholders, representing at least 75% in value of the issued shares. The deal will also require the approval of the High Court of Singapore.
Singapore’s sovereign wealth fund GIC, the largest shareholder in GLP with a stake of almost 37%, has given an “irrevocable undertaking” to vote in favour of the scheme, GLP said in its statement today.
In a separate statement, GIC said Nesta requires its undertaking before it would agree to make the offer. It agreed to give the undertaking after having considered the terms of the acquisition – in particular, the price and certainty of execution.
However, a source pointed out to IPE Real Estate that GIC has only given a “soft” undertaking. “That is, GIC is free to accept an unsolicited, higher competing bid if one comes in before the scheme meeting and is not matched by Nesta,” the source said.
Shareholders will vote on the scheme at the company’s annual general meeting to be held on 28 July.
The source also noted that the offer price is 64% above the average stock price since November 30, 2016 – the day before GIC called for a strategic review on the future of GLP.
GLP said the offer price represented an 8% premium over the highest ever closing share price, which occurred on two different days in 2013.
Seek Ngee Huat, GLP’s chairman who also chairs the special committee undertaking the strategic review, said that, after an extensive evaluation of all final proposals received, it was decided to accept the proposed scheme.
The decision was based on a belief that the proposed scheme “is compelling and value-enhancing for all shareholders”.
GLP’s independent directors said they concur with the opinion of GLP’s financial adviser that the proposal is “fair, from a financial point of view” to shareholders.
They made a preliminary recommendation to shareholders to vote in favour of the scheme.
Asked by IPE Real Estate for his comment on the offer, a key shareholder agreed that SGD3.38 was a “fair” price.
However, he added, there was no doubt from the beginning of the sale process that the Chinese consortium would win the race to take over GLP.
“It is a national service to keep the large China platform in Chinese hands. The deal is about the biggest China land play and the Chinese don’t want it to go to US private equity,” he said, referring to the losing bidder, Warburg Pincus.
Nesta is made up of HOPU, Hillhouse Capital, SMG (founded by Ming Mei), Bank of China Group Investment (based in Hong Kong), and Vanke, one of China’s largest residential developers.
The transaction is due to be completed on or before 14 April 2018.