HONG Kong-listed real estate fund manager ESR Group has received a privatisation proposal from a consortium of investors comprising Starwood Capital Operations, Sixth Street Partners, and SSW Partners, it said on Monday (May 13).
ESR, which sponsors four real estate investment trusts (Reits) in Singapore, received the non-binding and conditional proposal on Apr 25, which may lead to its privatisation and delisting from the Hong Kong Stock Exchange (HKEX).
Shareholders of ESR had previously said they were exploring options – including a privatisation – amid falling prices of property stocks in Hong Kong.
The announcement partly confirms earlier reports that a group of financial investors is planning a privatisation deal for the Warburg Pincus-backed ESR.
ESR noted that Warburg was not part of the consortium in the proposal, however, contrary to media speculation.
ESR said the consideration of the proposal is at a preliminary stage and there is therefore no certainty that it will ultimately lead to an offer as defined in the Takeover Code.
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But it added that Warburg, together with ESR’s founders, are in discussions with the consortium and that they welcome the proposal, which they believe is in the best interests of shareholders.
Under the proposal, shareholders can choose to receive cash consideration or roll their shares into the go-forward private company, subject to terms.
As at Monday, the consortium is interested in around 15.7 per cent of ESR’s shares. Warburg is interested in 14 per cent of the shares, and ESR’s founders 7.4 per cent.
The founders – comprising Stuart Gibson, Charles de Portes and Jeffrey Shen – are also interested in outstanding shares from the company’s pre-listing employee stock incentive scheme, its share option scheme, and its share award scheme, which represent around 0.05 per cent of total issued shares.
ESR is the largest sponsor and manager of Reits in the Asia-Pacific region. In Singapore, these include ESR-Logos Reit, Suntec Reit, ARA-US Hospitality Trust, and Sabana Industrial Reit.
Shares of ESR were halted on Monday pending the announcement, and will resume trading on HKEX from 9 am on Tuesday.
