According to Bloomberg, a deal for GLP could rank as one of the biggest-ever buyouts in Asia Pacific.
(See: Global Logistic Properties update on strategic review)
(See also: GLP said to seek bids for $11.3 bil company)
DBS lead analyst Rachel Tan says there is limited upside following GLP’s share price rally to close to the research house’s fair value estimate of $3.00, which is pegged to historical takeover premiums.
“We believe its current share price at close to 1.2x P/NAV which in our view is fair when compared to former transaction multiples,” says Tan in a report on Wednesday.
“At the higher end of the historical takeover premiums of 1.32x, the fair value price could be at a high of $3.23, implying only an 11% upside,” she says.
However, Tan adds that this is “in view that the bidding process could close soon as reported in the latest news and assuming a takeover happens”.
In the event that the bids do not results in a takeover of the company, Tan warns that GLP’s share price could fall back to close to 1.0x P/NAV at $2.50-$2.60.
“Scenarios that could derail our thesis include partial disposal of the assets instead of a full takeover, further delays in the process, and higher-than-expected revaluation of the assets from potential completion of developments,” she says.
