Is a boardroom spat brewing at China Logistics, amid the jostling for foothold in e-shopping boom?
Several China Logistics executives have said that ESR’s entreaty for a boardroom seat is ‘not an option’ because they compete for the same customers
Warburg Pincus, the US private equity firm that failed in the 2017 buyout of the world’s largest warehouse operator, has set its sight on China’s No 2 manager of logistics space, as it jostles to enlarge its footprint in the country’s booming e-commerce industry.
The firm’s e-Shang Redwood Group unit has bought 11.6 per cent of China Logistics Property Holdings since May 7, making ESR the third-largest stakeholder in the Hong Kong-listed warehouse operator, according to stock exchange filings.
With its stake valued at HK$1.1 billion at current prices, ESR wants to seek for a seat on China Logistics’ 15-member board, a bid aimed at exerting some influence to maximise the value of its investments, according to a source familiar with the matter.
For now, China Logistics has officially declined to comment, even though several executives have said a board seat for ESR is “not an option”.
“(ESR) is our competitor, it is not ideal if they become our board member,” said China Logistics’ executive director and chief financial adviser Kennth Cheuk Shun Wah, in an interview with the South China Morning Post in Shanghai. “How do we ensure our interest will not be eroded?”
ESR and China Logistics have common customers – as well as investors – between them. JD.com, China’s second-biggest online shopping company, uses the warehouses operated by both companies for its inventory, and owns 9.9 per cent in both.