GLP

GLP: Annouced it is in final negotiations to buy LaSalle Investment Jap portfolio that could fetch up to ¥140 billion ($2.12b). If successful, the acquisition would be the biggest property deal in Jap in two yrs. GLP currently owns 69 properties in Japan valued at ($7.6b). Blackstone Group is also in talks and in close competition with GLP for the real estate assets. If successful, GLP Jap assets could be worth $9.7b….

We note however that GLP’s current net gearing stands at 32.2%, with cash of $1.5b Assuming deal is funded entirely by debt, Net gearing will swell up to 60.8%, which prompts possibilities of Grp looking to monetize Jap assets soon to raise cash, or possible equity raising. Street generally remains bullish on grp’s long-term prospects with most houses having Buy Calls and a Mean TP of $2.58.