atans1

GLP: Third time lucky

In China, Corporate governance, Logistics on 20/12/2010 at 5:26 am

If you can’t get yr excuses right first time, try and try again.

Finally Global Logistic Properties (GLP) got it right. As I blogged earlier it got its nickers in a twist when explaining why  its prospectus did not disclose a non-compete agreement http://atans1.wordpress.com/2010/12/16/glps-non-actionimplications-for-sgxs-bid-for-asx-spore-inc/

Last Wednesday BT reported,”[it] did not specifically disclose information about a non-compete arrangement with ProLogis because it didn’t see the US-based firm as a real threat to its business, sources close to GLP told the media yesterday … GLP had looked into whether ProLogis was likely to re-enter the Chinese market when the non-compete clause expires next February, and felt that the chance was ‘remote’ … it would be hard for ProLogis to restart its mainland China business, as it had sold all its assets and brand name in the country to GLP … They may still have a large operation elsewhere in the world. They may still have a large market cap. But they have no presence in Asia – that’s it,’ said the source on why the non-compete information was not material.

This reasoning I can buy. And it would seem, so does the market. On Friday it was +0.14 to 2.26. It was trading at 2.18 the day before BT had an article abt its non-disclosure. It then fell.

Why did it take so long to come up with a decent explanation  It wrote twice to the media spouting gibberish. Hope it gave those who advised on those letters, “six of the best” or fired them. And a bonus for whoever came up with a reasonable, and understanable explanation.

BTW Citi and UBS, during this period had “buy” on GLP with target prices of $2.80 and $2.65, respectively. Both had vested interests. They were among the joint bookrunners and underwriters of the IPO, with Citi also the joint global coordinator and issue manager.

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