ESR shares jump 4.9% on US$7.1 billion take-private offer by founders, private funds

Shares of ESR Group jumped by the most in nearly seven months after a consortium including its founders, US funds and Qatar state investment arm offered to take it private, valuing Asia-Pacific’s biggest manager of logistics assets at HK$55.2 billion (US$7.1 billion).

The consortium offered HK$13 per share for about 60 per cent of the company it does not already own or control, according to a Hong Kong stock exchange filing late Wednesday. The consortium is also offered a choice to exchange into shares of an offshore entity under its control. ESR shareholders may elect a combination of cash and share swap, it added.

The offer is 13.6 per cent higher than its price when trading was halted on November 28. The shares advanced 4.9 per cent to HK$12 at 9.38am local time, the biggest gain since May 14.

The consortium members include Starwood Capital, Sixth Street, SSW Partners, Warburg Pincus, Qatar Investment Authority and the founders of ESR. They will fund their take-private offer partly from a US$1.5 billion loan facility from MUFG, Mizuho Bank and United Overseas Bank.

The take-private bid aims to “fully realise the group’s platform value in the long term,” according to the filing. ESR, which manages a US$154 billion portfolio, needs to become an asset-light platform, refocus on new economy sectors, simplify its current portfolio with noncore asset divestitures and optimise its balance sheet, it said.