PSA withdraws from P&O bid, DP World jubilant

PSA withdraws from P&O bid, DP World jubilant

	Published : Sat, 11 Feb 2006 11:15 By : Paula Demarzio Print this Story

LONDON: The takeover drama involving Britain's largest port operator Peninsular & Oriental Steam Navigation Co. ended Friday, when one of the bidders, Singapore-based PSA International, pulled out, virtually paving the way for the remaining bidder, Dubai Ports World, to pursue its 3.9-billion-pound cash offer for the assets of the British company.

P&O's chairman John Parker said the company's directors have unanimously backed the DP World's offer. The board will recommend the 520 pence-a-share offer to the shareholders Monday.

The merger will create the world's third largest ports operator. DP World is currently at No 7. Hong Kong-based Hutchison Whampoa is the largest operator, followed by PSA International.

DP World had been the original suitor for P&O after having offered 3.3 billion pounds. However, PSA International entered the fray in December with an improved offer of 3.5 billion pounds. The P&O board had then opted for the PSA International's offer, which forced DP World to raise its price.

PSA International, owned by Singapore government's investment company Temasek Holdings Pte, said Friday it has decided not to increase its offer and will therefore not pursue the acquisition. It said in a statement, "For PSA, to pay more than this price would not be compatible with commercial business sense and PSA's future success."

P&O, one of the oldest cargo transporting companies in the world, with an estimated 6 per cent share of global container traffic, has a significant presence in the erstwhile British colonies, especially Australia and India. It has three divisions -- ferries, ports and logistics. It operates 29 ports runs a ferry service between Britain and France. DP World, which does not have any large operations in these regions, will derive benefit out of the merger.

DP World' chairman Sultan Ahmed bin Sulayem, who works for the crown prince of Dubai, Sheikh Mohammed bin Rashid al-Makhtoum, said the company is pleased by this development and remains encouraged by the P.& O board's unanimous recommendation to its shareholders to accept the offer.

This is the second time that DP World has scored over PSA International. In late December 2004, it had bought American rail company CSX for over $1 billion rivalling a bid by PSA.