• Strategic review of options
• Request from largest shareholder
• No definite transaction entered

Undertaking independent strategic review of options

GLP announced that it is undertaking an independent strategic review of options to enhance shareholder value, after it has received a request from its largest shareholder, GIC Real Estate Private Ltd, which holds a 37% stake in the GLP. The group has appointed JP Morgan as a financial advisor to assist on the strategic review and has also set up a special committee, comprising four independent directors, to oversee the strategic review.

Making preliminary approaches to various parties

We understand that the group, through JP Morgan, is in the process of making preliminary approaches to various parties to evaluate the viability of options for its business. Management emphasized that no definite transaction has been entered into with any party. Overall, we see this as a positive development that underscores the fact that the GLP's share price has been persistently undervalued but caution against speculating on a near-term sale of the company, which is uncertain.

Significant long term fundamental value in GLP shares

We continue to see significant long term fundamental value in the group's shares at current prices, given its business portfolio and leading positions in its key markets. We believe the outlook for advanced logistic facilities remains firm with the growth of e-commerce globally, particularly in the group's major market China where online shopping is undergoing vibrant growth. The group manages over US$12b of assets in China and enjoys significant operating leverage with its scale and network of key clients. Maintain our BUY rating with a fair value estimate of S$2.37.

Source: OCBC Research - 2 Dec 2016