Dubai Ports may acquire P&O |
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Published
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Mon, 31 Oct 2005 12:05
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British ports and ferries group P&O (Peninsular & Oriental Steam Navigation Co) said on Sunday that it was in talks with an unnamed party regarding its possible takeover. DP World (Dubai Ports World), a Dubai based corporation, is supposed to be the company involved, according to sources privy to the talks.
The company, which was formed after Dubai Ports Authority and Dubai Ports International got merged, is rapidly extending its reach in Asia, India and the Middle East. The bid is supposed to be estimated at 3 billion-pounds.
P&O, in a statement, said: "P&O confirms that it has received a very preliminary contact from a third party, which may or may not lead to an offer for the company". P&O has been on the takeover hit-list for quite some time now. Floated in 1840, P&O is considered to be one of the world's biggest port operators whose operations in Asia, the Americas and Asia account for its 70 per cent profits.
DP World, which started its operations in 1972, has 27 container terminals and logistics operations in over 100 ports in 18 countries. Its main service is containerised cargo handling. Earlier this year, it had bought the US group CSX Corporation beating Whampoa Hutchison and PSA International for a sum of £640 million. This acquisition gave it the status sixth-largest port operator in the world. Besides, it is owned by the UAE’s state's government and its ruling family.
Stuart Fraser, a director at Brewin Dolphin Holdings in London, which owns a stake in P & O commented: "Ports are a growth business on a global scale. For Dubai it would be a strategic investment for the long-term".
Shares of P&O rose 6.75 pence to 310.25 pence on Friday in London. The company’s net debt was 660.6 million pounds at the end of June.
DP World is being advised by Deutsche Bank AG on the possible bid for P&O. DP World, led by its executive chairman Sultan Ahmed Bin Sulayem, will prevail upon Sir John Parker, Chairman of P& O, to convince him that the long-term investment required to develop ports is not suited to the public arena.
Only last week, P&O had announced that the slowing UK economic growth had affected its profits at its ports in Tilbury and Southampton.
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P&O's port proposal gets conditional okay from government 