ESR Group owns and manages 50 million square meters of real estate in 28 countries.
ESR Group
ESR Group, Asia’s largest real estate fund management company in terms of assets under management, has received an offer from a consortium including U.S. private equity giants Starwood Capital Group and Warburg Pincus to privatize the Hong Kong-listed company.
ESR said on Wednesday that the consortium proposed to acquire about 60% of the company it does not already own for HK$13 per share. The proposed deal values ESR at HK$55.2 billion (US$7.1 billion) and, if successful, would be the Hong Kong Stock Exchange’s largest privatization transaction since 2021, according to a joint statement.
ESR said the offer represented a 55.7% premium to the closing price of HK$8.35 on April 24, the day before the consortium submitted a non-binding offer. After trading resumed on Thursday, ESR’s share price rose approximately 3.3% to HK$11.82.
The consortium is led by Starwood Capital Group, U.S. investment firm Sixth Street and SSW Partners, the statement said. Also joining the group are Warburg Pincus, sovereign wealth fund Qatar Investment Authority, and ESR co-founders Jeffery Shen, Stuart Gibson and Charles Portes.
The offer allows ESR shareholders to receive cash, transfer their shares into a future private company, or both. The consortium said it had the support of shareholders not involved in the takeover, which held more than 51%, as of Wednesday.
The group said in a statement that ESR “needs to transform into an asset-light platform, refocus on new economic sectors, simplify the existing portfolio through divestiture of non-core assets, realize cost synergies and optimize the balance sheet.” It added, Privatization would therefore be better if it allows for more flexible execution and avoids short-term earnings fluctuations.
ESR said it is Asia’s largest real estate investment manager, with $154 billion in assets under management as of June. The company owns and manages 50 million square meters of properties in 28 countries around the world, focusing mainly on industries such as logistics and data centers. Brett Krause currently serves as ESR chairman on an interim basis after Jeffrey Perlman resigned as chairman in September to take on the role of CEO of Warburg Pincus; Perlman remains on ESR’s board of directors.
