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3 Things You Should Know About The Possible Privatisation Of Global Logistic Properties Ltd

Modern logistics facilities provider Global Logistic Properties Ltd (SGX: MC0) has been a hot topic in the news recently due to a possible privatisation.

The excitement has caused its share price to shoot up by around 45% since the end of October 2016.

Here are three things investors should know about the potential sale of Global Logistic Properties:

1. GIC

On 1 November 2016, Bloomberg reported that a consortium led by China Investment Corp (CIC) was planning to bid for Global Logistic Properties’ shares and take the company private. But, the news was quickly shot down by the logistics facilities owner: The company announced that it was not in any discussions with CIC at that time.

A month later on 1 December, Global Logistic Properties announced that it was undertaking a strategic review of its business at the request of its largest shareholder, GIC Real Estate Pte Ltd. The shareholder is a unit of GIC, one of the Singapore government’s investment arms. It has a stake of nearly 37% in the company.

2. A potential bidding war

In the December announcement, Global Logistic Properties also mentioned that it has appointed JP Morgan to help it with the strategic review. The company did not specify what a strategic review means exactly, but it seems that JP Morgan has been appointed to help Global Logistic Properties find a buyer.

Last week, Bloomberg reported that there may be three groups of investors interested in the company. They are the Blackstone Group, a Warburg Pincus-led consortium, and a Chinese group that includes Hopu. With so many parties involved, there may be a real chance that a bidding war would be started for Global Logistic Properties.

3. Valuable assets in US and China

Global Logistic Properties has made at least two acquisitions of billion-dollar logistics real estate portfolios in the US since 2015. As a result, the company is now the second largest warehouse operator in the country.

Global Logistic Properties is also the largest owner of modern logistics facilities in China. This means that the company has a strong foothold in two of the largest economies in the world and that its assets are very valuable.

The company currently has a market cap of S$12.1 billion and is trading at 1.0 times tangible book value and offers a 2.3% dividend yield.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim doesn’t own shares in any companies mentioned.