UPDATE 1-Warburg Pincus backed ESR shelves largest HK IPO this year


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* ESR Cayman had planned to raise up to $1.24 bln

* Deal floundered due to high valuation and tough market – sources

* Warburg Pincus to decide later whether to relaunch – source (Adds details, HK market impact)

By Julie Zhu

HONG KONG, June 13 (Reuters) – Logistics real estate developer ESR Cayman Ltd on Thursday pulled what would have been the largest Hong Kong listing so far this year, according to two people with direct knowledge of the matter.

The company, backed by private equity firm Warburg Pincus LLC, had planned to raise between $1.16 billion and $1.24 billion.

The people said ESR had targeted a relatively aggressive valuation which had made the deal a hard sell amid challenging market conditions.

Demand was too weak in the current market and Warburg Pincus would decide later whether to relaunch the deal, one of the people said. It was unclear how long the deal would be pulled for, both sources said.

ESR, which manages a range of property-focused funds and vehicles as well as its own directly held property investments, did not immediately respond to a request for comment.

The company had been due to price its IPO on Thursday and begin trading in Hong Kong on June 20.

The sources, who declined to be identified as they were not authorised to speak on the matter, said the deal had not been significantly affected by ongoing political unrest in Hong Kong because the firm was focused on global investors, not Chinese family-and-friend-type investors.

However, one said mass street protests would not help the overall financial markets in the city.

Thousands of protesters have taken to the streets in the southern Chinese territory this week over a planned extradition agreement with mainland China.

Hong Kong’s Hang Seng Index tumbled 1.8% at one point on Thursday, following Wednesday’s 1.7% fall.

Seven shareholders were selling shares in the IPO, including Warburg Pincus unit WP OCIM, Goldman Sachs unit Goldman Sachs Investments Holdings (Asia) Ltd, and e-commerce firm JD.com Inc’s Jingdong Logistics Group Corp.

CLSA and Deutsche Bank are joint sponsors for the IPO. (Reporting by Julie Zhu; Writing by Alun John; Editing by Stephen Coates)


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