Warburg Pincus-backed ESR Cayman seeks as much as US$1.45 billion in revived Hong Kong IPO
- The Asia-Pacific-focused logistics real estate platform could become this year’s second largest IPO in Hong Kong after Budweiser Brewing
- Deal may signal a rebound in investor appetite for IPOs amid unprecedented political strife in Hong Kong since June
ESR Cayman, the Asia-Pacific-focused logistic real estate developer co-founded by Warburg Pincus, is looking to raise as much as US$1.45 billion in a second attempt at flotation in Hong Kong amid signs of revival in investor appetite.
The initial share offering comes after it shelved its plan in June, citing “market conditions”. The original proposal sought to raise US$698.8 million based on the top end of the IPO price range. In the new proposal unveiled on Monday, the company may raise US$563.3 million based on the midpoint of the price range. The stock is expected to start trading on November 1, the company said.
"With an asset-light model to what traditionally has been an asset-heavy real estate sector through the funds we manage, we are able to generate infrastructure-like return with commensurate risks to our shareholders," chairman Jeffrey Perlman said at a media briefing. This means ``high return on equity and low risks from a potential downturn," he said.
Under the bullish take-up scenario, ESR Cayman will become the second largest IPO this year. Budweiser Brewing Company APAC, the Asian unit of world’s biggest brewer, raised US$5 billion in September.
When asked about the reason for pulling its initial application in June, Perlman said it was because of the less favourable geopolitical environment back then compared to now.
“Anytime [you are conducting an] IPO you have to be cognisant of the geopolitical and macro-environment. We felt that with the banks’ guidance, June was not the best time to move forward with the transaction,” said Perlman.
