Date: November 7, 2017
The proposed privatisation of GLP is set to become one of the largest delisting exercises in the region this year. In this edition of our e-newsletter, SIAS summarises the key details of the privatisation and important considerations shareholders should take note of.
1. How did the proposed privatisation come about?
On 1 December 2016, upon a request from GLP’s largest shareholder, GIC Real Estate Private Limited (GIC), GLP constituted a Special Committee to undertake and oversee an independent strategic review. The Special Committee comprised four independent directors, focused on maximising shareholder value.
Nesta Investment Holdings Limited was ultimately selected as the preferred bidder to present the scheme of arrangement to GLP shareholders.
2. Who is the Offeror?
Nesta Investment Holdings Limited is owned by investment companies with a global capital investor base, namely, HOPU, Hillhouse Capital, SMG Eastern (which is owned by GLP Co-founder and Chief Executive Officer Ming Z. Mei), Bank of China Group Investment and Vanke. Each member of the consortium is highly experienced in the different elements of the logistics ecosystem.
3. Is the price fair to shareholders?
The scheme consideration offered by the offeror is S$3.38 in cash per share.
This represents a premium of approximately 81% over the company’s 12-month volume weighted average price of S$1.87, up to and including 30 November 2016, the day before the strategic review was announced. It is also 8% higher than the all-time high closing price of the shares of S$3.13 on 24 October 2013 and 15 November 2013.
The Independent Financial Adviser (IFA) has opined that the scheme consideration is fair and reasonable, from a financial point of view, and has advised the independent directors of GLP to recommend shareholders to vote in favour of the scheme.
The independent directors of GLP concur with the recommendation of the IFA and recommend that the shareholders vote in favour of the scheme.
The shareholders will have to make their own judgement.
Shareholders are advised to read the IFA letter and the recommendation of the independent directors of GLP which are both set out in the Scheme Document in their entirety.
4. I’m only a minority shareholder, will my vote count?
For the scheme of arrangement to be successful, two shareholder approval conditions will need to be satisfied:
- Of the total number of shareholders present and voting in person or by proxy at the scheme meeting, more than 50% in number must vote to approve the scheme; and
- Of the total number of shares voted by shareholders present and voting in person or by proxy at the scheme meeting, at least 75% in value must vote to approve the scheme
The conditions ensure that minority shareholders have a greater say in influencing the outcome of the vote.
In addition, a scheme of arrangement affords greater protection to minority shareholders as the overall process is overseen by the High Court.
You should know that the Offeror and its concert parties will abstain from voting on the
scheme. GIC has already provided an irrevocable undertaking to vote in favour of the scheme.
5. What are the possible outcomes?
A scheme of arrangement has a binary outcome – it either succeeds or fails.
If the scheme is approved by shareholders and then sanctioned by the High Court, GLP will be delisted. Shareholders should expect to receive their payment by 19 January 2018. Shareholders should note this is only the expected date and should refer to future announcements by GLP for the exact date.
If the scheme is not approved by shareholders, GLP will continue to be listed on the Singapore Exchange, and shareholders will not receive any payment. Shareholders should also note that there is no assurance that the trading volumes and/or market prices of the shares will be maintained at the current prevailing levels.
