July 13, 2017 / 4:42 AM / a year ago

UPDATE 1-GLP, Asia's No. 1 warehouse firm, chooses Chinese group for buyout -sources

* Set to be Asia’s biggest buyout by private equity firms

* Chinese private equity group is backed by GLP CEO

* Auction had been two-way race with Warburg Pincus-led group (Recasts and writes through with details of the deal)

By Anshuman Daga

SINGAPORE, July 13 (Reuters) - Global Logistic Properties (GLP) has picked a Chinese private equity consortium over a Warburg Pincus-led group for final talks to acquire Asia’s biggest warehouse operator, two sources familiar with the matter said on Thursday.

GLP has a market value of around $9.2 billion and the deal will rank as the largest buyout in Asia by private equity firms, which are increasingly targeting bigger takeovers after raising record funds.

After months of negotiations, a special committee of GLP’s independent directors is aiming to finalise a deal this week with the Chinese consortium, which is led by Hopu Investment Management and Hillhouse Capital Group and is backed by GLP CEO Ming Mei, the sources said.

The sources declined to be identified as they were not authorised to speak about the deal.

GLP and the Chinese consortium declined to comment. Singapore sovereign wealth fund GIC, which owns a 37 percent in GLP, also declined to comment.

GLP, which owns a $41 billion portfolio of industrial assets spread across China, Japan, Brazil and the United States, is benefiting from a boom in e-commerce that has fuelled demand for modern logistics facilities. It counts Amazon and JD.com among its clients.

Concerns over the transparency of the sale process and business ties of the Chinese consortium had forced some potential bidders to re-evaluate their interest, sources have said, making the auction a two-way race with Warburg Pincus and its logistics partner e-Shang Redwood.

GLP has said it had taken measures to alleviate potential conflicts of interest.

GIC last year nudged GLP to start a strategic review of its business. JPMorgan was then hired by GLP as its financial adviser. GLP’s shares have since soared nearly 50 percent to their highest levels in more than three years.

Hopu’s founder Fang Fenglei, one of China’s best known dealmakers, is a GLP board member and Hopu partly owns GLP’s China business. The warehouse operator garners two-thirds of its revenue from China, where it has a dominant market position.

Trading in the company’s shares were halted on Thursday pending the release of an announcement. (Reporting by Anshuman Daga; Additional reporting by Elzio Barreto; in HONG KONG; Editing by Edwina Gibbs)

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