Chinese-Led Group Nears Logistics Deal -- WSJ

By P.R. Venkat and Phred Dvorak Features Dow Jones Newswires

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 14, 2017).

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A consortium fronted by two Chinese investment funds has been tapped as the preferred bidder to buy Singapore's Global Logistic Properties Ltd., in a closely watched contest for control of one of the world's largest warehousing companies.

The group -- which beat out a competing bid from U.S. private-equity giants Warburg Pincus LLC and Blackstone Grou LP -- is led by China's Hillhouse Capital Group, known for its early and savvy bets on Chinese internet champions like Tencent Holdings Ltd., and Hopu Investment Management Co., which helped lead a $2.5 billion investment in GLP's China assets in 2014, according to people familiar with the deal. Hopu founder Fang Fenglei sits on GLP's board.

The group is offering around 3 Singapore dollars (US$2.18) a share, one of the people familiar with the deal said. That is slightly above the S$2.70 price that GLP shares last traded at on Wednesday, prior to a trading halt Thursday morning. The offer would value the company at around S$14 billion (US$10.2 billion), based on the number of shares outstanding.

The Hillhouse-Hopu group also includes GLP Chief Executive Ming Mei, as well as developer China Vanke Co. and Bank of China Ltd., the people said.

GLP has said Messrs. Fang and Mei have recused themselves from all board decisions relating to the bids.

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The consortium is likely to get a pledge from GLP's largest shareholder, Singapore sovereign-wealth fund GIC Pte Ltd., to sell its shares to the group, the people familiar with the deal said, which would effectively clinch the deal. GLP is likely to make an announcement on the deal by the end of the week, the people said.

GLP, which has a current market capitalization of around US$9 billion, is a major player in the booming business of storing and moving goods from suppliers to consumers. It manages nearly US$40 billion in logistics assets -- a bit more than half the amount of No. 1 warehouse owner Prologis Inc. of the U.S. But GLP says it is the biggest owner of warehouses in many of the world's most important markets, including China, Japan and Brazil, and the second largest in the U.S. after Prologis.

It has grown rapidly through acquisitions, including the US$8.1 billion purchase, with GIC, of U.S. industrial property owner IndCor from Blackstone.

Earlier this year, GIC, which owns 37% of GLP, asked for a strategic review of the company's options, kicking off the process that led to the potential sale.

Write to P.R. Venkat at venkat.pr@wsj.com and Phred Dvorak at phred.dvorak@wsj.com

(END) Dow Jones Newswires

July 14, 2017 02:47 ET (06:47 GMT)