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Global Logistic to buy Gazeley for 2.4b euros
GLOBAL Logistic Properties (GLP) said before trading hours on Monday that the company and its subsidiaries will acquire leading European logistics platform, Gazeley, for about 2.4 billion euros (S$3.8 billion).
Gazeley's portfolio comprises about 32 million square feet of total gross leasable area upon full build-out of the land bank held by entities which are directly or indirectly owned by BSREP Bermuda Europe Holdings Ltd.
BSREP is in turn owned by BSREP Europe Holdings LP, a fund affiliated with Brookfield Asset Management Inc.
The deal involves the acquisition of all BSREP shares from BSREP Europe Holdings.
Gazeley's portfolio is concentrated in Europe's key logistics markets - 57 per cent in the UK, 25 per cent in Germany, 14 per cent in France and 4 per cent in the Netherlands. It comprises 17 million sq ft of Gazeley's existing assets, which are 98 per cent leased with a weighted lease expiry of nine years. and a development pipeline of 16 million sq ft buildable area.
About 60 per cent of its existing assets have been built within the last five years and 85 per cent of the development pipeline is focused in the UK, one of Europe's most land-constrained markets.
GLP intends to inject the Gazeley portfolio into its fund management platform, in line with previous practice. The company is already in negotiations with capital partners interested in the European logistics market.
It said that the deal will allow the company to acquire one of the highest-quality logistics portfolios in Europe in class and location, and an experienced local management team with a strong development track record.
Two subsidiaries, Pearl Income Sà rl and Pearl Income Investments UK Ltd, have been incorporated in Luxembourg and England, for the purpose of the acquisition.
Assuming the deal was completed at April 1, 2016, GLP's earings per share will increase to 16.43 US cents, compared to 16.32 US cents for FY17. Its net tangible assets would remain unchanged at US$1.76.
Ming Z Mei, co-founder and chief executive officer of GLP, said: "We have been looking to expand to Europe and this portfolio presents an attractive entry point given the quality and location of the assets. This transaction adds a premier operational and development platform for us in Europe and is part of our long-term strategy to expand our fund management business."
The deal is supported by Nesta Investment Holdings Ltd, which has offered to buy out all shares in GLP and take the Singapore-listed entity private.
GLP intends to dispatch the scheme document pertaining to Nesta's offer to shareholders in the next 60 days.