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Warburg part of investor club looking to privatize ARA

A consortium of investors including Warburg Pincus and ARA’s CEO John Lim have issued a proposal to de-list the Singapore-based fund manager.

ARA Asset Management, the Singapore-listed real estate fund manager, has announced that a group of investors has proposed to take it private for S$1.78 ($1.28: €1.16) per share, representing a significant premium and even exceeding the highest closing price of ARA shares over the past 2.5 years.

The deal would value ARA at just under S$1.8 billion.

The consortium consists of: JL Investment Group, the private investment arm of ARA chief executive, John Lim; Straits Trading Company, and Hong Kong-listed Cheung Kong Property, in partnership with private equity firm Warburg Pincus, and Chinese investment manager Avic Trust.

Straits Trading, JLIG and Cheung Kong Property are the existing controlling shareholders of ARA with an aggregate stake of 46.24 percent as at November 8, 2016.

“We are excited to partner with Mr Lim and ARA’s management team on this initiative and the opportunity to accelerate the company’s growth by leveraging the combined capital markets capabilities of AVIC Trust and Warburg Pincus,” said Joseph Gagnon, managing director and head of real estate of China and Southeast Asia, Warburg Pincus.

“By working with ARA shareholders and Warburg Pincus, we believe that AVIC Trust can help to grow ARA’s platform in China and open the doors for more future business opportunities in the country,” added Yao Jiangtao, Chairman of AVIC Trust.

The deal will require approval of at least 75 percent in value of ARA shareholders present and voting in person or by proxy. It would also be subject to approvals from governmental and regulatory agencies in China.

It is expected that the acquisition will be completed in the first half of 2017.

ARA is a Singapore-based real estate investment manager that has both listed REITs and private real estate funds under management. Since the company’s formation in 2002 and listing in 2007, it has built a portfolio across Asia Pacific of around S$30 billion worth of assets, as at 30 September 2016.

DBS Bank and Goldman Sachs are joint financial advisers to the consortium.