PAG launches $671 mln unsolicited takeover bid for Spring REIT (updated)

Spring Real Estate Investment Trust

26/09/2018 07:40

(Adds share move, company no comment, context, background)
    HONG KONG, Sept 26 (Reuters) - Hong Kong-based private
equity group PAG said on Wednesday a unit of the firm had
launched a HK$5.24 billion ($671 million) unsolicited takeover
bid for Spring Real Estate Investment Trust (REIT)  1426.HK .
    The announcement, which could be the latest in a string of
private equity backed M&A deals in Asia this year, sent Spring
REIT's shares up more than 30 percent. 
    PAG Real Estate's offer of HK$4.85 for each unit of Spring
REIT represented a 61.7 percent premium over its closing price
of HK$3.00 on Monday, it said in a statement. Hong Kong markets
were closed on Tuesday for a public holiday. 
    PAG's bid for Spring REIT would value the company at $780
million, and is the latest in a long battle between the two.
    "The Offeror believes that it is necessary to replace Spring
REIT's existing Manager and conduct a strategic review to
address Spring REIT's continued under-performance," the PAG
statement said.
    Spring REIT confirmed the offer in an exchange filing, but a
spokeswoman for the REIT did not immediately respond to a
request for further details. 
    PAG Real Estate, and parties acting in concert with it, own
about 14.8 percent of Spring REIT, according to the filing. 
    Last year, the private equity firm attempted to have the
REIT's manager, Spring Asset Management Ltd, removed from its
position, but this proposal was rejected at a November EGM held
by the REIT. 
    Spring Asset Management Ltd is a subsidiary of Japanese
private equity firm Mercuria Investment Co. Mercuria did not
immediately respond to an emailed request for comment. 
    PAG said that the offer would only go ahead if independent
unitholders rejected Spring REIT's proposal to acquire a
shopping mall in Huizhou, a city in China's Guangdong province
across the border from Hong Kong. 
    Private equity-backed M&A deals in Asia Pacific hit a new
record high in the first nine months of this year, amounting to
$71 billion, according to Thomson Reuters data. 
    The surge comes as investment firms are flush with new
capital to deploy for bigger deals. Hillhouse Capital closed a
$10.6 billion private equity fund last week, the biggest in the
region. PAG is also planning a new Asia fund that aims to raise
as much as $6 billion, Reuters reported in April. urn:newsml:reuters.com:*:nL3N1W5205
 urn:newsml:reuters.com:*:nL3N1RQ36A 
    In August, a Hillhouse-led consortium expressed an interest
to offer $46 per share for Yum China Inc, the biggest fast-food
chain in China. The offer was rejected by the company’s board
subsequently.  urn:newsml:reuters.com:*:nL3N1VJ54D

    
    
    

    ($1 = 7.8144 Hong Kong dollars)

 (Reporting by Alun John and Kane Wu; Editing by Stephen Coates)
 ((Alun.John@thomsonreuters.com; +852-28415827;))