Singapore's GLP accepts $11.5b Hopu, Hillhouse-backed buyout offer

The consortium also includes Chinese property developer Vanke, Bank of China’s investment arm BOC Group Investment, and Schwartz-Mei Group, an investment firm founded by GLP co-founders Jeff Schwartz and Ming Mei and currently owned by Mei. It has offered to pay S$3.38 per share for GLP, a significant premium to the July 12 closing price of S$2.69. Following the announcement, the stock jumped to S$3.30.

GLP indicated in February that multiple investors submitted buyout proposals as part of a strategic review initiated last year at a request from GIC Private. GIC is the company’s largest single shareholder, with a stake of 36.6% - Hillhouse is second at 8.1%, while Hopu is part of a consortium that holds a 1.5% interest.

In 2014, Hopu brought several LPs from its second fund into GLP alongside a Bank of China investment unit and China Life Insurance. They committed $1.6 billion. A second tranche took the total to $2.5 billion as Boyu Capital and several Chinese strategic investors came on board. In addition to an equity stake in GLP, the consortium owns about 30% of the company’s China subsidiary.

According to its most recent annual report GLP had 55 million square meters of warehouse facilities completed or under development worldwide as of March 2017, including 28.7 million sqm in China, 6.2 million sqm in Japan, 16.1 million sqm in the US and 3.8 million sqm in Brazil. The company leads in terms of completed area in all markets except the US, where it is in second place behind Prologis.

GLP’s market leadership is most pronounced in China, where its 17.5 million sqm in completed assets dwarfs its nearest competitor Goodman at 2.5 million sqm. The company expects strong growth in e-commerce to drive demand for quality warehousing stock in the country, where warehouse space per capita is just one thirteenth that in the US.

In addition to warehouse operations, GLP’s growth strategy includes developing greenfield warehouse space and expanding its global footprint through its fund management platform. The fund had $27 billion in invested capital and $12 billion unallocated as of the company's most recent annual report. Fund structures include real estate investment trusts (REITs), income funds and development funds.

Fund management fees in the 2017 financial year came to $181 million, up from $150 million the previous year. The total comprises $126 million in asset and property management fees and $55 million in development and acquisition fees. Revenue from the entire portfolio grew from $777 million to $880 million over the same period, while net profit grew from $1.03 billion to $1.06 billion.

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• Topics
• Southeast Asia
• Greater China
• Buyouts
• PIPEs
• Infrastructure
• Singapore
• China
• Hillhouse Capital Management
• Hopu Investment Management
• Logistics