HK-listed ESR Group receives privatisation proposal from investor group

The process is currently at the preliminary stage.

Hong Kong-listed ESR Group Limited announced it has received a proposal to privatise from a consortium of investors formed by Starwood Capital Operations, L.L.C., Sixth Street Partners, LLC, and SSW Partners LP.

In a bourse filing, the real estate fund manager said this could result in a delisting from the stock exchange. The proposal will also allow shareholders to either receive cash consideration or roll their shares into the go-forward private company, subject to the terms of the final rollover arrangements.  

Reports have earlier said that a group of financial investors are planning a privatisation deal for Warburg Pincus-backed ESR Group.

The group clarified that Warburg is not part of the consortium. However, Warburg and the ESR founders – Stuart Gibson, Charles de Portes, and Jinchu Shen – are in discussion with the consortium and they are welcoming the indicative proposal, the manager noted.

ESR Group said the consideration of the proposal is at the preliminary stage. Therefore, there is no certainty that this will lead to an offer, it added. 

Citigroup Global Markets Asia Limited is acting as the financial adviser to the company to help evaluate the indicative proposal. 

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Currently, the consortium is interested in 15.7% or 662,107,703 of the company’s ordinary shares.

Warburg is interested in 14.04% or 591,440,160 shares, and the founders in 7.43% or 312,969,989 shares.

ESR founders are also interested in 7,799,856 outstanding share options granted under the pre-IPO employee stock incentive scheme, as well 384,000 outstanding share options granted under the share option scheme, and outstanding performance share units and restricted share units granted under the Share Award Scheme which can vest into a maximum of 1,926,950 underlying shares.