Warburg-backed ESR Gauging Investor Demand To Relaunch HK IPO

ESR Cayman Ltd., backed by private equity giant Warburg Pincus, started gauging investor demand for a Hong Kong initial public offering, four months after it postponed a first attempt, people with knowledge of the matter said.

The developer of logistics warehouse systems launched the process this week, the people said, asking not to be named as the information is private. ESR had sought to raise as much as $1.24 billion in an IPO in June but withdrew the sale because of what it said were unfavorable market conditions. There is no indication of what amount it may seek to raise a second time, although one of the people said it could be similar to its last attempt.

A representative at ESR declined to comment.

The potential return of ESR would represent another major turnaround for the fortunes of the Hong Kong stock exchange, which has dropped to third place globally among exchanges in terms of funds raised, from the top spot it held last year, data compiled by Bloomberg show.

Just last month Budweiser Brewing Company APAC Ltd. raised more than $5 billion in its IPO, months after scrapping its first attempt to raise as much as $9.8 billion. Companies have raised about $18 billion in IPOs in Hong Kong so far, a 44% drop from a year earlier, the data show.

The rapid growth of e-commerce in Asia Pacific, fueled by local players such as Alibaba Group Holding Ltd., has boosted demand for logistics warehouse systems. ESR is raising capital as it continues to expand in the region. It bought a majority stake in Singapore’s Sabana Investment Partners Pte. after pledging to invest more than $1 billion in a logistics park in Yokohama, Japan.

Deutsche Bank AG and CLSA Ltd. are joint sponsors for ESR’s offering, according to a preliminary prospectus filed in September.

Bloomberg