ESR Cayman Limited (SEHK:1821) (ESR) signed a conditional acquisition agreement to acquire ARA Asset Management Limited (ARA) from a group of investors for $5.3 billion on August 4, 2021. Under the terms of the transaction, ESR Cayman Limited will pay $519 million in cash, issue 1.2 billion consideration shares (consideration securities) and pay $387 million by the issue of 111.5 million convertible vendor loan note instruments (consideration VLNs). The cash consideration is subject to the adjustment. ESR will raise the cash via a stock placement and internal resources. On August 24, 2021, the parties entered into an amendment agreement, pursuant to which the number of consideration shares and the principal amount of consideration VLNs will be adjusted in accordance with an agreed calculation methodology if necessary. This will not change the total consideration, the cash consideration or the aggregate number of consideration securities issued under the acquisition agreement with $519 million payable in cash and $4,673 million by the issue of 1,345,898,078 consideration securities, with the allocation between consideration shares and consideration VLNs to be determined in accordance with the agreed calculation methodology. United Overseas Bank Limited is providing certain debt to ESR. On completion, ARA will become a subsidiary of ESR.



The composition of the Board will be increased from its current 11 Directors to 14 Directors and ESR will appoint three additional non-executive Directors with effect from completion. ESR has not granted any shareholder (including the sellers and the consideration recipients) any right to appoint a Director. On completion, the existing Chief Executive Officers of ARA will continue as Chief Executive Officers of the ARA Group, the existing co-Chief Executive Officers of Logos will continue as co-Chief Executive Officers of Logos and the other core ARA and Logos management teams will be retained in appropriate roles. Wealthman Group will be entitled to appoint the Chairpersons of and have a veto over the appointment of the Chief Executive Officers nominated by the Group to, the managers of Fortune REIT, Prosperity REIT and Hui Xian REIT for so long as it and its affiliates collectively remain the largest unitholder of the relevant REIT. Straits will retain its existing right to appoint the Chairperson of Suntec REIT. Lim Hwee Chiang (John) will be entitled to be appointed as a Senior Advisor to ESR. Stuart Gibson and Jinchu Shen will continue to serve as co-Chief Executive Officers of ESR. ARA Chief Executive Officer, Moses Song will be staying around. Logos co-founders Trent Lliffe and John Marsh will operate their own slice of the ESR industrial empire. On November 3, 2021, the Board approved the appointment of Lim Hwee Chiang (John), Chiu Kwok Hung, Justin and Rajeev Kannan as Directors post completion of the transaction.

The transaction is subject to listing of and permission to deal in all the consideration shares and conversion shares, approvals from Bermuda Monetary Authority, Securities and Exchange Board of India for the indirect change of control of LAI Investment Manager Private Limited, United Kingdom Financial Conduct Authority in respect of ESR or any other persons acquiring or increasing control over Venn Partners LLP and Cromwell Investment Services Limited for the purposes of Part XII of FSMA (United Kingdom Financial Services and Markets Act 2000), Overseas Investment Act 2005 (NZ), Treasurer of the Commonwealth of Australia, Hong Kong Securities and Futures Commission, Monetary Authority of Singapore, Registrar of Moneylenders, obtaining relief from Australian Securities and Investments Commission and approval from shareholders of ESR in a meeting scheduled on or before October 31, 2021. As of September 30, 2021, ESR CAYMAN LIMITED requires additional time to finalize the Circular, the Circular is expected to be dispatched to the Shareholders on or before October 22, 2021 and the EGM is expected to be convened on or before November 15, 2021. The Board of Directors (excluding the independent non-executive Directors) of ESR consider the transaction is on normal commercial terms, fair and reasonable and in the interests of the shareholders and hence recommend the transaction to the shareholders. On November 3, 2021, the shareholders of ESR approved the transaction.

An Independent Board Committee comprising all the independent non-executive Directors of ESR has been established to advise the shareholders in connection with the transaction and the issue of the consideration securities. As of August 26, 2021, SK INC. together with the irrevocable undertakings received from each of Redwood, Laurels, OMERS and Jingdong, ESR Cayman Limited has received irrevocable undertakings from shareholders holding in aggregate approximately 53% of the existing total issued shares to vote in favor of the ordinary resolutions to approve the transaction and the specific mandate at the extraordinary general meeting. As on September 13, 2021, the change of control event under issued securities will occur on the completion of the acquisition of ARA Asset Management Limited by ESR Cayman Limited. It is currently expected that completion will take place in the fourth quarter of 2021 or the first quarter of 2022. The long stop date for the transaction is December 24, 2021. ARA expects the Proposed Transaction to be a positive development which will enable it to leverage ESR's complementary capabilities, expertise, commitment to ESG, capital and customer relationships to deliver a best-in class offering. As of January 20, 2022 Along with Perlman, ESR Co-founders & Co-Chief Executive Officer, Shen and Gibson, will continue their roles in leading the expanded Group across its various functions and markets as a unified platform.

Morgan Stanley Asia Limited acted as financial advisor and Freshfields Bruckhaus Deringer acted as the legal advisor to ESR Cayman Limited. United Overseas Bank Limited (SGX:U11) is providing certain debt financing related advice to ESR. Citigroup Global Markets Singapore Pte. Ltd., DBS Bank Ltd. and Oversea-Chinese Banking Corporation Limited (SGX:O39) acted as financial advisors and Richard Watkins and Amy Beckingham of Latham & Watkins LLP acted as the legal advisor for ARA Asset Management Limited. Computershare Hong Kong Investor Services Limited acted as the scrutineer for ESR Cayman Limited.