Hong Kong-listed warehouse developer ESR Group gets takeover bid from US consortium led by Starwood Capital

The consortium of US investment firms, which owns 15.7 per cent of ESR, put forward a non-binding proposal that could result in delisting

Warburg Pincus, the largest shareholder, is not among the consortium but is part of discussions and welcomes the proposal

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ESR manages real estate assets in mainland China, Japan, South Korea, Australia, Singapore, India, and New Zealand. Photo: SCMP Pictures

Published: 10:14pm, 13 May 2024Updated: 12:06am, 14 May 2024

Starwood Capital Group, one of the largest real estate investors worldwide, is part of a consortium of shareholders proposing to take Asian warehouse developer ESR Group private, according to a filing to the Hong Kong stock exchange.

The consortium comprising Starwood and two other US firms, SSW Partners, and Sixth Street, owns 15.7 per cent of ESR. It put forward its “non-binding and conditional proposals” to the property investment fund manager on April 25 for “a possible privatisation of the company”, that could result in a delisting if it went ahead.

“Under the indicative proposal, it is contemplated that shareholders will have the ability to choose to receive cash consideration or roll their shares into the go-forward private company, subject to the terms of the final rollover arrangements,” ESR Group director Brett Harold Krause said in Monday evening’s filing on behalf of the board.

No price or financial terms were mentioned in the filing, as the company said the discussions were at a preliminary stage only.

Warburg Pincus, the largest shareholder of ESR, with a 14.04 per cent stake, is not part of the consortium.

However, ESR said Warburg and the company’s founders are “in discussions with the consortium and they are welcoming of the indicative proposal and believe that it is in the best interests of the shareholders”.