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).
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.
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.