UPDATE 2-China's SF in talks to take Kerry Logistics private - sources
Adds SF statement, industry consolidation
By Julie Zhu and Kane Wu
HONG KONG, Feb 5 (Reuters) - Chinese logistics giant SF Holdings Co 002352.SZ is in talks to take Hong Kong-listed Kerry Logistics Networks Ltd 0636.HK private, in the sector's latest consolidation attempt, four people with knowledge of the matter told Reuters.
SF is preparing to offer a decent premium to Kerry's current trading price, said one of the people, who declined to be named as the information is confidential.
In the past six months, buyers have paid an average premium of 38.1% to a Hong Kong-listed company's average 1-month share price to take them private, according to Refinitiv. Based on that, a take-private of Kerry Logistics would cost SF about HK$23.27 a share.
A deal proposal could be announced as soon as next week, two of the sources said.
SF has been approaching Kerry Logistics since mid-2020 and is hoping to expand its presence in Southeast Asia by acquiring Kerry's warehouses there, according to the sources.
Shares of Kerry Logistics rose 25% on Thursday to close at HK$23.45 apiece, giving the company a market cap of $5.44 billion. The company halted trading of its shares on Friday morning before the stock market opened, pending an announcement.
SF, which also halted its shares from trading on Friday, said in a filing that it plans to acquire a stake in a company and expects its trading suspension to last for up to five days. nL4N2KB1GT
SF did not respond to a Reuters request for comment. Kerry Logistics declined to comment.
The take-private discussion comes amid consolidation in China's logistics sector, which is seen largely benefiting from the country's e-commerce boom during the COVID-19 pandemic.
Some existing shareholders of logistics companies are seeking to divest in the highly fragmented sector while cash-rich industry players are snatching up more assets.
Kerry Logistics reported revenue of HK$21 billion ($2.7 billion) for the first half of 2020, up 10% year-on-year. Its core net profit of HK$845 million was 26% higher than the same period a year ago.
($1 = 7.7527 Hong Kong dollars)
(Reporting by Julie Zhu and Kane Wu; Editing by Stephen Coates and Devika Syamnath)