Hong Kong-listed ESR Group received an offer from a consortium, including Starwood Capital Group and Warburg Pincus, to take it private in a deal valued at HK$55.19 billion ($7.09 billion), the company said on Wednesday.
The offer price of HK$13 per share represents a 55.7% premium to the real estate company’s closing price on April 24 prior to the submission of the non-binding offer.
The deal comes as China tries to emerge from the property crisis, which triggered a 60% drop in ESR shares from their peak in Feb. 2021.
Scheme shareholders can elect a cash alternative which includes a cancellation price of HK$13.00 for every share held, a share alternative which includes one equity share for every share, or a mix of cash and shares in a proportion of their choosing, the company said in a statement.
“As of Dec 4, shareholders representing 51.2% of the scheme shares held by disinterested shareholders have provided irrevocable undertakings to support the proposal,” the consortium said in a statement.
An application has been made to the stock exchange to resume trading from Dec. 5, ESR added, after it was halted on Friday.
Morgan Stanley Asia and Deutsche Bank AG, Hong Kong Branch are acting as co-lead financial advisers, while JLL is acting as the real estate adviser to the consortium.
In May, ESR said it had received an initial proposal from a consortium led by Starwood Capital Group, Sixth Street Partners and SSW Partners, aiming to take the company private.
The consortium subsequently expanded to include Warburg Pincus, ESR‘s top shareholder with around 14% stake, and others. Qatar Holding, which is owned by the sovereign wealth fund Qatar Investment Authority, joined the consortium in October.
ESR went public in Hong Kong in 2019 after pricing its initial public offering at HK$16.8 per share and raising $1.6 billion. It manages a range of property-focused funds and its own property investments.
Reuters
