So GLP is paying part of the purchase with its own "flesh"?
Business Times - 05 Jan 2011
GLP buys key stake in China's Airport City for 2.48b yuan
53% stake to be paid in cash and shares at $2.1581 apiece
By LYNETTE KHOO
GLOBAL Logistic Properties (GLP) said late yesterday that it would buy a 53 per cent effective interest in China's Airport City Development Co Ltd (ACL) in a cash-cum-shares transaction worth about 2.483 billion yuan (S$485 million).
The arrangement will involve two steps. GLP will acquire from Prosper Line Investments and Great Ocean Overseas Holdings their combined effective stake of approximately 53 per cent in ACL, and then subsequently dispose of assets that are non-core to GLP.
The closing consideration of 1.4 billion yuan for the core assets of ACL will be settled with 30 per cent cash and 70 per cent shares, GLP said.
A cash payment of 592 million yuan will also be paid at closing to the sellers - representing the value of a non-core subsidiary of ACL that has been disposed prior to closing. The balance of the consideration - to be paid once the non-core assets are disposed - of approximately 488 million yuan will be paid in instalments.
The GLP shares will be issued at the price of $2.1581 per share, which is the five-day volume weighted average price prior to Jan 4, 2011, or the date of the sale and purchase agreement. The cash payment will be funded from the proceeds of GLP's initial public offering.
Established in December 2004, ACL is the sole developer of air cargo handling and bonded warehouse logistic facilities for Beijing Capital International airport.
It owns about 800,000 square metres of gross floor area in the Beijing airport, divided into five main function zones: air cargo terminals, an express centre, a customs supervision area, a bonded logistic centre and an office complex.
According to its website, ACL is also actively involved in the planning and construction of its parent firm's project called Capital Airport City, which is a multifunctional mega-structure at the Beijing airport that will integrate air transport, logistics, shopping malls, tourism and leisure centres, and industrial development.
Last month, GLP also announced that it will acquire a 19.9 per cent stake in Shenzhen Chiwan Petroleum Supply Base Co Ltd, the parent company of BLOGIS, the second largest modern logistics facility provider in China after GLP. The HK$539 million (S$89.1 million) deal prompted 'buy' calls from analysts, who foresee synergies between China's two largest modern logistic facilities providers and earnings accretion from the deal.
Yesterday, GLP shares fell two cents to $2.14.
---------------------------------------------------------
The Straits Times
Jan 5, 2011
GLP to buy stake in Beijing airport firm
GLOBAL Logistic Properties (GLP) - a recent mega local listing - is acquiring a majority stake in a Beijing airport firm for 2.48 billion yuan (S$482 million). The sellers are Prosper Line Investments and Great Ocean Overseas Holdings.
An investment banker told The Straits Times that the deal to acquire a 53.1 per cent stake in Airport City Development is not new and has been in the works for some time.
Airport City is the sole developer of the air cargo handling and bonded logistics facility at the Beijing Capital International Airport.
In its prospectus lodged last September, GLP revealed it had entered into a 'framework agreement' in August with a third party to buy the 53.1 per cent stake. It had signalled in its prospectus a lower purchase price of about US$335 million (S$430 million), with 70 per cent of the deal financed by the issue of new shares and 30 per cent in cash.
In its statement last night, GLP said the new shares will be priced at S$2.1581 apiece.
Mr Jeffrey Schwartz, its deputy chairman and chairman of the executive committee, said: 'This is an important transaction for us, allowing us to take our position in the growing air cargo industry of China to a higher level.'
The investment advances GLP's strategic position as a provider of air-cargo logistics facilities in China. The properties involved will be GLP's first air cargo facilities to be sited within an airport perimeter. Previously, the company's air cargo properties have been located in the vicinity of airports but outside the perimeter.
The facilities are located beside the second runway of the airport in the newly setup Beijing Tianzhu Free Trade Zone. They currently serve major air freight companies that are existing clients of GLP in other cities and markets.
GLP, which raised US$2.9 billion from its IPO in October last year, is on an acquisition trail in China.
Citi Investment Research said it believes the 'commencement of GLP's acquisitions in China should be a strong catalyst to drive a continuous re-rating on the stock'. It has a 'buy' recommendation with a target price of $2.80.
GLP shares closed two cents down at $2.14 yesterday.
GABRIEL CHEN
Homepage
PR Newswire
