CIC Group Said to Mull Bid for $6 Billion Property Owner GLP

(Bloomberg) -- Global Logistic Properties Ltd., the $6 billion owner of industrial property, has attracted takeover interest from an investor group that includes China's sovereign fund, people with knowledge of the matter said.

China Investment Corp., Hopu Investment Management and Hillhouse Capital Management have held talks about making a joint offer for Singapore-based GLP, according to the people. The suitors have reached out to potential partners to weigh their interest in joining the consortium, one of the people said, asking not to be identified because the information is private.

GLP shares gained 8.7 percent to S$1.945 at the close Wednesday in Singapore, after earlier jumping by an intraday record of 14.5 percent. Any deal would depend on the receptiveness of GLP's biggest shareholder, Singapore sovereign wealth fund GIC Pte, and there's no certainty the consortium will proceed with a bid, the people said.

A transaction could rank among Asia's biggest-ever buyouts and would add to this year's record flow of Chinese acquisitions abroad, a binge that's been partially driven by anticipation of further declines in the yuan. GLP was trading Tuesday at about 0.7 times book value, making it a potentially attractive buyout target. 

“GLP has been operating in China and the Chinese consortium knows the target very well, so it's a deal working in their favor,” Andrew Sullivan, a managing director at Haitong International Securities Group Ltd., said by phone. “The Chinese investors are expecting the yuan to depreciate further, so they are watching very closely at any opportunity to acquire overseas assets.”

Bulking Up

Officials at the consortium members declined to comment or didn't immediately respond to requests for comment. A representative for GIC declined to comment.

“The company wishes to advise that it is not in discussions with the above referenced investor group at this time,” GLP said in an exchange statement Wednesday in response to queries from the Singapore bourse. “The company remains committed to enhancing shareholder value and continues to review and assess potential opportunities.”

GLP has been involved in at least $17.1 billion of acquisitions in the past three years, data compiled by Bloomberg show, as the warehouse owner seeks to bulk up and take advantage of booming demand from customers like Alibaba Group Holding Ltd. and JD.com Inc. The company's clients also include Adidas AG, French retailer Carrefour SA and luxury-goods giant LVMH Moet Hennessy Louis Vuitton SE, its website shows.

Shares of GLP have declined more than 40 percent from their peak three years ago through Tuesday. They closed at S$1.79 Tuesday, below their 2010 IPO price, giving the company a market value of about $6 billion.

U.S. Foray

“We believe that it is undervalued,” said Christopher Wong, a Singapore-based senior investment manager at Aberdeen Asset Management Asia Ltd., which owns shares of GLP. “The business has significant potential in a space that is growing at a rapid pace.”

GLP teamed up with GIC in a 2014 deal to purchase IndCor Properties Inc. from Blackstone Group Inc. for $8.1 billion. The acquisition gave GLP access to about 117 million square feet (10.9 million square meters) of industrial real estate and helped boost its footprint in the U.S., adding to its exposure in China, Brazil and Japan.

Hopu, the Beijing-based buyout firm, was part of a consortium that invested $2.5 billion in GLP's Chinese business in 2014. Its founder, veteran dealmaker Fang Fenglei, joined GLP's investment committee that year and was appointed to the Singapore company's board as a non-executive director.

GIC, which manages Singapore's foreign reserves, holds a 37 percent stake in GLP, while Hillhouse owns 8.2 percent, Bloomberg-compiled data show. CIC, the $814 billion Chinese wealth fund, has previously partnered with GLP for deals in Japan and Brazil.

--With assistance from Pooja Thakur and Bei Hu To contact Bloomberg News staff for this story: Joyce Koh in Singapore at jkoh38@bloomberg.net, Cathy Chan in Hong Kong at kchan14@bloomberg.net, Zhang Dingmin in Beijing at dzhang14@bloomberg.net, Vinicy Chan in Hong Kong at vchan91@bloomberg.net. To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Marcus Wright at mwright115@bloomberg.net, Timothy Sifert

With assistance from Zhang Dingmin, Joyce Koh, Vinicy Chan, Cathy Chan