Nesta Investment Holdings and Global Logistics Properties (GLP) on July 14 jointly announced the proposed acquisition of all the issued and paid-up ordinary shares in the capital of GLP, excluding treasury shares, in a deal that values GLP at about S$16 billion (US$11.68 billion) on an equity value basis.
The proposed acquisition will be effected by way of a scheme of arrangement in compliance with the Singapore Code on Takeovers and Mergers. Nesta Investment intends to delist and privatize GLP.
Nesta Investment is a wholly-owned subsidiary of Nesta Investment Holding MidCo, which is owned by a consortium comprising HOPU Logistics Investment Management Company, Hillhouse Capital Logistics Management, SMG Eastern, Bank of China Group Investment and Vanke Real Estate (Hong Kong) Company.
The scheme consideration is S$3.38 cash per share and it will not be reduced by the proposed dividend of S$0.06 per share announced on May 19 2017.
The offer represents a premium of 64% over the closing price as of November 30 2016 – the last trading day immediately before December 1 2016, being the date on which GLP released the announcement in respect to the undertaking of an independent strategic review.
The price also represents an 81% premium over the 12-month volume weighted average price of S$1.87 and exceeds the highest ever closing price since listing. It likewise represents a premium of 25% over the closing price on July 12 2017, being the last full trading day immediately prior to the joint announcement, and 30% over the net asset value per share as of March 31 2017.
The joint announcement marks the conclusion of the independent strategic review, first announced on December 1 2016, which led to the receipt of firm proposals on June 30 2017. The review was overseen by the special committee of the board of directors of GLP, comprising four independent directors, focused on maximizing value for all shareholders.
The committee evaluated the proposals received, taking into consideration a number of factors, including price, level of execution risk and expected completion timeframe.
After conducting an in-depth and independent review and evaluation of the proposals received, the committee in consultation with its financial adviser J.P. Morgan and legal adviser Allen & Gledhill had recommended Nesta Investment as the preferred bidder.
The proposed scheme is considered superior due to a number of factors, including price certainty at significant premiums to historical prices, greater degree of deal certainty due to the limited conditionality of the bid, and it would likely be completed within a defined timeframe, which would reduce execution risk.
GIC Real Estate Private Limited, as the single largest shareholder of GLP with a 36.84% stake, requested the independent strategic review at the end of 2016. It has provided an irrevocable undertaking to Nesta Investment to vote in favour of the scheme, which is expected to be completed on or before April 14 2018.
Acting as the lead joint financial advisers Citi, Morgan Stanley and Goldman Sachs advised Nesta Investment in respect of the acquisition and the scheme, and are providing the financial resources confirmation in connection with the transaction. DBS and China International Capital Corporation (Singapore), collectively with the lead joint financial advisers, also advised Nesta Investment in respect of the acquisition and scheme.
GLP and its subsidiaries own, manage and develop logistics facilities. The group owns and manages a portfolio of 55 million sq m of modern logistics facilities in China, Japan, the US and Brazil. GLP is also one of the world’s largest real estate fund managers, with assets under management of about US$39 billion.
Photo: glprop.com
