Global Logistic Properties (GLP)

(08-12-2010, 08:54 AM)dydx Wrote: Now that this is in the newspaper, it may end up becoming a mini public outcry, since ultimately GIC initiated the IPO and has benefited from it. My own view remains that GIC shouldn't have taken the IPO route as its divestment strategy.

If there is indeed a non-compete agreement between GLP and ProLogis, to make sure all involved in the IPO would come 'clean' before GLP enters the public stock market, it should rightfully be explicitly disclosed in the prospectus.

We shall see how this will evolve...

You're right, it's likely to get all the IPO shareholders in arms over the non-disclosure. Plus, this IPO was heavily promoted by GIC so they are answerable to the article.

I've noticed that GLP has halted trade as at the time of this writing. Perhaps they are planning to address the news report?

We always stress on transparency ?

GLP's clarification - http://info.sgx.com/webcoranncatth.nsf/V...3001DA49E/$file/Clarification_on_BT_Article_dated_8_December_2010.pdf?openelement

(08-12-2010, 12:08 PM)Musicwhiz Wrote: You're right, it's likely to get all the IPO shareholders in arms over the non-disclosure. Plus, this IPO was heavily promoted by GIC so they are answerable to the article.

I've noticed that GLP has halted trade as at the time of this writing. Perhaps they are planning to address the news report?

Fundamentally I do not see any difference in the expiration of the non-competition clause. We did not see GLP making a spurge of acquisitions before the expiration (though there is still a few months before Feb 2011) so it may be a little hard to argue that this gives GLP an advantage.

So if it does not give GLP an advantage, does the expiration of the agreement makes a difference?

And we should also consider that GLP probably has a non-disclosure confidential agreement with ProLogis on the 'non compete' clause. If that is the case, would that be a legal argument for the non-disclosure in the IPO prospectus in the first place.

And I dun see why IPO investors should be up in arms over this? How many read the prospectus in details in the first place? My view is that even if GLP has disclosed the 'non compete' clause (assuming they do not have a confidential agreement with ProLogis on this) would the outcome of the IPO be any difference? How many investors would stay away because of this? Most bought on the 'name' of GIC so I think it wont deter too many investors.

I'm vested in GLP.

I think the key point is that there is an existing non-competition arrangement between GLP and ProLogis which expires in Feb 2011, and GLP did not disclose it in the prospectus as it has taken the view that it is not material information. This is what I gathered from reading GLP's 2-page clarification announcement dated today (8Dec10).

So far the counter has been sold down by $0.05 after trading resumed at 1400 hours, and is now trading at $2.03, with the 'sell' queue substantially longer and larger than the 'buy' queue.

Just wonder whether some hedge funds may be attracted by this situation?

(08-12-2010, 02:53 PM)dydx Wrote: I think the key point is that there is an existing non-competition arrangement between GLP and ProLogis which expires in Feb 2011, and GLP did not disclose it in the prospectus as it has taken the view that it is not material information. This is what I gathered from reading GLP's 2-page clarification announcement dated today (8Dec10).

I still think its more interesting to consider the possibility that GLP and ProLogis has a confidential agreement that prohibits the disclosure in the first place - regardless of whether GLP considered it material it or not.

Of cos, they have taken the position that it is not material now; but if a confidential agreement does not exists, then it would be logical to assume that GLP would have disclose it in the first place.

I dun know what the disclosure regulation says about confidential agreement but it is not uncommon for listed companies not to reveal certain confidential agreement with parties it deals with.

eg. CSC just revealed that one of its subsidiary, CS Construction & Geotechnic Pte. Ltd has reached an out-of-court settlement with Penta-Ocean Construction Company Limited. No details were disclosed other than CSC saying that 'the Board is of the view that the settlement will not have any material adverse impact on the consolidated net tangible assets and earnings per share of the Company'. Do we says CSC is not being transparent in this instance?

Probably not. Perhaps the argument could be made for GLP to disclose that they have a confidential agreement with ProLogis which cannot be disclosed? I dun know if that would work.

Hmm. My takeaway is somewhat different. To me, the concern is not so much of whether GLP considers it material or whether there are legal implications prohibiting the disclosure in the first place.

The main point GLP was trying to emphasize was that since it did not highlight there was a non-compete cause in the first place, the message should have been that ProLogis was already free to compete. (Though that may not be the case in reality) That, in my view, is a more conservative assumption, unless there are investors who are separately aware of this non-compete clause and bought into GLP with this consideration partially in mind? If that's the case, then it would indeed be something worth mentioning.

Otherwise, I don't really see why there should be any cause for concern.

Not vested.

(08-12-2010, 05:38 PM)Blackjack Wrote: Hmm. My takeaway is somewhat different. To me, the concern is not so much of whether GLP considers it material or whether there are legal implications prohibiting the disclosure in the first place.

The main point GLP was trying to emphasize was that since it did not highlight there was a non-compete cause in the first place, the message should have been that ProLogis was already free to compete. (Though that may not be the case in reality) That, in my view, is a more conservative assumption, unless there are investors who are separately aware of this non-compete clause and bought into GLP with this consideration partially in mind? If that's the case, then it would indeed be something worth mentioning.

Otherwise, I don't really see why there should be any cause for concern.

Not vested.

Well said.

Fault will only lie with GLP if it mentioned that such a agreement existed in the first place for an indefinite period of time. But they didn't and instead made a conservative decision to assume no existence of such a pact in the first place. Hence investors should have no worries.

http://info.sgx.com/webcoranncatth.nsf/V...80045058F/$file/GLP_Clarification_on_Article_dated_13_December_2010.pdf?openelement

One question to GLP ....If it is immaterial then why did GLP have non-competion arrangement with ProLogis in the first place.......

the profit reported is without the competition, but everyone thought otherwise. with competition from a more experience, more financially powerful player, shouldn't the profit / growth forecast be lower ? and hence valuation of the company.