Oct. 18 (Bloomberg) -- Global Logistic Properties Ltd. jumped 11 percent on its first trading day after raising S$3.45 billion ($2.7 billion) in Singapore’s biggest initial public offering since 1993.
Global Logistic, the overseas logistics unit of Government of Singapore Investment Corp., advanced to S$2.17 at the close of trading from the sale price of S$1.96 a share, after earlier reaching S$2.19. The stock was sold at the top end of the range marketed to investors.
Asia has taken the lead in IPOs globally this year with seven of the 10 largest sales worldwide, according to data compiled by Bloomberg. India today starts the 151.5 billion rupee ($3.4 billion) sale of stock in Coal India Ltd., the nation’s biggest-ever IPO. Also this week, Mapletree Industrial Trust, owned by a unit of Temasek Holdings Pte, is set to raise S$853 million in its Singapore IPO.
“They’re the first among the IPOs that are coming out at this time and they’re one of the biggest, giving them first dibs on getting the liquidity in the market,” said Janice Ding, a Singapore-based analyst at CIMB Research Pte. She expects the share price to be at around S$2.15 in six months, barring any major announcements.
Funds for Expansion
Global Logistic plans to use S$1.7 billion of the proceeds to expand in China and Japan, and about S$600 million to repay existing shareholder loans, according to its IPO prospectus. There is an overallotment option to expand the sale by 234.7 million shares.
The company, whose customers include Wal-Mart China, Deutsche Post AG’s DHL and FedEx Corp., is led by Deputy Chairman and Executive Director Jeffrey Schwartz. Schwartz, 51, is the former chief executive officer of ProLogis, the world’s biggest warehouse owner.
“In China, we see just incredible growth opportunities,” Schwartz said in an interview with Bloomberg Television today. “We’re a fraction of the size we can be long-term or even medium-term.”
GIC, manager of more than $100 billion of Singapore’s foreign-exchange reserves, bought the assets from ProLogis for $1.3 billion in December 2008.
“Any further share price upside depends on what they decide to do with their land bank in China, whether they decide to develop or sell the land,” Ding said. “Also, the price might get a boost if they decide to put some of their investment properties in a trust.”
Global Logistic owns, manages and leases 296 properties within 122 integrated parks, according to its prospectus. It manages and leases a gross floor area of about 6.2 million square meters (66.7 million square feet) in its network spread across 25 major cities in China and Japan, according to a sale document.
“GLP’s key differentiator is the skill they have in China, where they’re quite large,” said Kristy Fong, an investment manager at Aberdeen Asset Management Asia Ltd., which oversaw $75 billion as of Aug. 31. Fong said Aberdeen hasn’t bought any GLP shares as it wants to understand the company better, though she said the stock is priced “reasonably.”
GIC, through its subsidiaries, will own 56.8 percent of the company after the share offering and 51.5 percent if the over-allotment option is exercised, according to the sale prospectus.
Citigroup Inc. and JPMorgan Chase & Co. led a group of investment banks arranging the IPO, which also included UBS AG, China International Capital Corp. and DBS Group Holdings Ltd.
Singapore Telecommunications Ltd.’s initial offering in the city-state in 1993 raised more than S$4 billion.
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