This article is from the Australian Property Journal archive
AUSTRALIA’S most sought-after industrial and logistics properties will be snapped up by a consortium consisting of sovereign wealth fund, the Qatar Investment Authority, Starwood, Sixth Street, and SSW Partners, as competition for I&L assets show no signs of slowing.
The consortium deciding it is easier to build scale in the I&L sector through merger and acquisitions, has made a US$7.1 billion takeover bid for ESR.
Overnight on Hong Kong Stock Exchange, ESR announced that it has reached a binding agreement with consortium to move forward with the takeover.
ESR shareholders will have the option to choose between receiving HK$13.00 per share in cash or one share in a new entity, EquityCo, for each ESR share they hold. They can also opt for a combination of both cash and shares.
The offer price is a substantial premium for ESR shareholders – 55.7% higher than the company’s last traded share price.
It is a staggering 199.1% premium to the company’s Net Tangible Asset Value per Share (being HK$4.35) as at 30 June 2024.
ESR has backed the proposal, telling investors that as APAC’s largest real asset manager with a total asset under management of US$154 billion as of 30 June 2024, the group is well positioned in the new economy sectors of logistics, data centres and alternative real asset classes across Japan, Korea, Australia, China, Southeast Asia and India.
“To fully realise the group’s platform value in the long term, the offeror believes that the company needs to successfully transition to an asset-light platform, refocus on new economy sectors, simplify its current portfolio with non-core asset divestitures, and optimise its balance sheet.
“These strategic initiatives may come with significant short-term earnings fluctuations and the offeror believes that the strategic transformation is best executed in a private setting away from the short-term pressures of the public markets and the constraints of the Listing Rules,” ESR said.
The takeover will give the consortium control in some of Australia’s best industrial and logistics assets, including the Amazon robotics fulfilment centre, Australia’s largest logistics facility, a $500 million estate in Sydney’s Eastern Creek, and the $4.2 billion Moorebank Logistics Park.
It will add substantial scale to Starwood’s industrial exposure down under, having purchased a $760 million portfolio alongside Arrow Capital Partners and Altis Property Partners.
Furthermore, the consortium will also become a major owner in ASX-listed Cromwell Property Group.
The takeover comes after ESR recently bought out industrial and logistics platform Logos from its Aussie co-founders John Marsh and Trent Iliffe.
The Logos acquisition added US$23 billion of AUM and 184 properties located in Australia, China, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Singapore and Vietnam to ESR’s portfolio.
