Nesta Investment Holdings Offers $3.38 Per Share To Takeover Global Logistic Properties Ltd: Is The Offer Price Attractive?

In our article last week here, we noted that Global Logistic Properties Ltd (SGX: MC0) or GLP is receiving firm proposals for bidder to acquire its shares.

Last Friday, it was clear that GLP will most likely be taken private by a consortium of investors made up of Hopu, Hillhouse Capital, Bank of China Group Investment, Vanke and SMG, which is owned by GLP chief executive Ming Mei.

The price offered per share to take over the company is S$3.38.

For minority investors who have vested interest in the company, what you might want to know here is whether the price offered is attractive.

In this article, we will just do a quick analysis of the attractiveness of the offer.

First of all, it is useful to note that the offer price is higher than the highest price achieved by GLP’s share in the last 5 years.

From a quick check in Google Finance, it can be seen that except for 2013, GLP’s share price had hardly topped S$3 per share.

As such, the current offer will likely appeal to shareholders who have waited to dispose the shares at an attractive price.

Secondly, we can ascertain the attractiveness of such offer by looking at some simple valuation metrics.

In the last three years, GLP has traded at around 10-15 times price-to-earnings ratio and 0.8-1 time price to book ratio, respectively.

Thus, the offer price of $3.38 implies a P/E ratio of 20.7 times, using the latest EPS for FY17 of 16.32 cents and a price to book ratio of about 1.8 times.

Both valuation metrics show that the current offer price is at a premium to the historical numbers.

In summary, based on what we have seen above, it’s likely that minority investors will perceive the offer price as satisfactory.

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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 contributor Lawrence Nga doesn’t own shares in any companies mentioned.