P&O accepts PSA bid; merger to create No 1 port operator

P&O accepts PSA bid; merger to create No 1 port operator

	Published : Thu, 26 Jan 2006 17:05 By : Andrew Stead Print this Story

LONDON: British ports, ferries and properties group Peninsular & Oriental Steam Navigation Co. is accepting the 3.6-billion-pound-takeover offer from Singapore's PSA International, casting aside a previously agreed 3.3-billion-pound offer from Dubai Ports World. The proposed takeover by PSA will see the creation of the world's No 1 ports company.

P&O said its board had recommended the 470 pence-per-share cash offer by PSA, which is a wholly-owned unit of Singapore government's investment company Temasek Holdings. Temasek already owns 4.1 per cent in P&O. The cash offer, tops the 443-pence-a-share offer from Dubai Ports World.
It is also at a 55 per cent premium of P&O's share price before the first bid was made on the company in last October.

The P&O-PSA entity will overtake the world's largest container port operator, Hong Kong's Hutchison Ports. Currently PSA is at No 3 position and P&O at No 4.

P&O has 29 container terminals under its operation. It also owns logistics facilities in over 100 ports in 19 countries. PSA has investments in 19 port projects in 11 countries.

Analysts feel the deal may face regulatory hurdles in view of large scale operations of the two companies. The deal provides for PSA to bring in 125 million pounds into P&O's main pension scheme, which has a deficit of 200 million pounds.

P&O's chairman John Parker said PSA had agreed to satisfy any regulatory demands. P&O's chief executive Robert Woods is expected to continue with the merged company running the British businesses and chairing the ferries division.

Meanwhile, there are several people, who have been following the developments, who believe that Dubai Ports World is likely to come up with a counter bid. PSA and Dubai Ports have contested earlier and Dubai Ports had outbid PSA paying 640 million pounds for the global port assets of U.S. firm CSX.

P&O's shares were trading at 507 pence, a premium to the rate offered by PSA.