Singapore only building stake in P&O; no plans to outbid DP World |
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Published
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Sun, 04 Dec 2005 01:35
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LONDON: P&O shares surged 11.5 percent yesterday after the Singapore government’s investment agency Temasek Holdings bought 24.3 millions shares or 3.2 percent of the UK-based ports and ferries group.
The transaction sparked off speculation that the Singapore government could be trying to make a counter bid to the £3.3bn offer made by Dubai Ports World. The deal increases Temasek’s stake in P&O to more than 4 percent.
Their advisor-broker UBS said they were authorised to buy as much as 10 percent of P&O shares at upto 460p a share. The market reacted to the speculation making P&O share price rise 11.5 percent at 491.62p and swelling trading volumes. The new price was far above the 443p-a-share D P World offer that P&O had accepted.
The speculation is not entirely unfounded as the Singapore firm would only be required to pay a £30m break fee, i.e., if P&O found their offer more attractive than D P World’s. Temasek would have to buy about 20 percent of P&O shares to be able to stop D P World from acquiring it. (D P World owns only 1.8 percent.) It would also need approval from 75 percent of voting shareholders.
Temasek portfolio of investments is worth a total of £35.3bn covering a wide spectrum of sectors – financial services, property, pharmaceuticals, transportation, media and engineering. It also controls the Neptune Orient Lines, one of the world’s biggest freighters. It also owns the Port of Singapore Authority – the world’s second biggest commercial port.
UBS had already bought 8.1 million shares at a little over 440p on Thursday. The brokerage firm said the Singapore government had no plans to outbid D P World and were only looking to increase their stake.
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P&O's port proposal gets conditional okay from government 