Sources: ESR to raise $1.6bn in Hong Kong IPO

ESR Cayman, a logistics real estate developer, is set to raise $1.6 billion as it’s planning to price its IPO at the middle of a marketed range, people familiar with the matter said.

The company and shareholders including Warburg Pincus LLC and Goldman Sachs Investments Holdings Asia could price the shares at HK$16.80 apiece, the people said. The shares were marketed at HK$16.20 to HK$17.40 each.

An upsize option to sell an additional 15% of shares will be exercised in full, said the people, asking not to be identified because the information is private. That would increase the total number of shares sold to about 752 million, based on Bloomberg calculations.

The pricing marks a turnaround for ESR, which in June postponed an attempt to raise as much as $1.24 billion, citing unfavourable market conditions. Budweiser Brewing Company

APAC pulled its first IPO try in July, further denting investor confidence. At $1.6 billion, ESR’s offering is set to trail only Budweiser’s $5.8 billion share sale, according to data compiled by Bloomberg.

A representative for ESR declined to comment.

ESR’s offering attracted the Ontario Municipal Employees Retirement System as a cornerstone investor, with the Canadian pension fund agreeing to subscribe for a total of about $585 million of stock, terms for the deal showed. APG Asset Management, General Electric Pension Trust and JD.com’s Jingdong Logistics Group are among the seven holders selling shares in the IPO.

ESR’s listing will boost Hong Kong’s IPO volume, which has slumped 43% to $18.7 billion this year, data shows. Despite ongoing anti-government protests and the US-China trade war, the city has been enjoying a good market window, with $2 billion-plus listings up at least 10% from their offer price and a number of small-cap IPOs popping on their debuts.