Amazon warehouse firm bought for $11.7bn


14 Jul, 2017

Amazon warehouse firm bought for $11.7bn

Asia's biggest warehouse operator, Global Logistic Properties (GLP), has been bought by a Chinese-led consortium for $11.7bn (£9bn).

GLP rents out its warehouses to some of the world's leading online retailers, including Amazon and Alibaba. The Singapore-based company manages 55 million square metres of logistics facilities in the US, China, Japan and Brazil.

Singapore sovereign wealth fund, GIC is the company’s biggest shareholder with a 37% stake. GLP's warehouse business has boomed since the rise of e-commerce and it makes about two-thirds of its revenues from China. However, despite this, GLP shares have tumbled down each year since 2015. This prompted GIC to nudge GLP to start a strategic review of its business.

GLP was then put up for auction and eventually sold to a leading Chinese private equity consortium for around $11.7bn. The group of several Chinese investors includes the Bank of China, private equity firm Hopu and Hillhouse Capital Management, whose investors include Alibaba's Jack Ma.

The consortium is offering S$3.38 in cash per share, representing an 81% premium over its 12-month volume weighted average price and a 25% premium over its last full trading day before the announcement.

GIC is supporting the transaction but is free to accept an unmatched superior offer.

"GIC played hard to get a decent offer", said a person with direct knowledge of the deal. "There's a good premium with very few strings attached".

Since GIC requested a strategic review of GLP’s business model late last year, GIC shares have risen 50%. However, following the news of the buyout, GLP shares soared 22% on Friday to a record high.

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