Bidding war looms over ABP

24-08-2006

Associated British Ports (ABP), Britain's largest ports operator, looks set to become the centre of a bidding war after Australian bank Macquarie announced last night that it was considering a takeover bid to counter a £2.48 billion offer made for the company by a Goldman Sachs-led consortium.

Just hours earlier ABP, which controls a quarter of the UK's ports including those in Southampton, Ipswich, Plymouth and Hull, revealed that it had finally succumbed to Goldman Sachs' advances after an 810p per share offer was made.

But the deal could now be in jeopardy after Macquarie said that, alongside the UK venture capital group 3i, it was part of a consortium considering making an alternative cash offer for ABP.

The Canada Pension Plan Investment Board and a Melbourne-based pension fund manager are also part of the Macquarie consortium.

Shares in ABP closed 6.5 per cent higher at 826.5p yesterday following speculation that a further bid to counter the Goldman Sachs offer would emerge.

But Macquari and 3i warned in a statement that there would be "no assurance" that any offer would be made.

Responding to the news, ABP chief executive Bo Lorenius said the company had received no offers other than that put forward by the Goldman Sachs consortium and stressed that the firm's shareholders were happy with the price that had been agreed with the US bank.

ABP, which previously rejected a 730p per share offer from Goldman Sachs, said yesterday that the consortium's latest bid recognised that the ports operator was a "unique strategic asset."

"The consortium's offer reflects that and recognises the strong operational and financial performance of the business," said ABP chairman Chris Clark.

"This is an excellent opportunity for shareholders to realise the significant value that has been created."

Goldman Sachs will be hoping that its offer for ABP remains attractive, after failing to close a takeover bid on airports operator BAA earlier this month after losing out to Spanish services firm Ferrovial.

A special company, Admiral Acquisitions, had been formed as part of the bid by the Goldman Sachs consortium to take over ABP. As well as Goldman Sachs its members include the Canadian firm Borealis Infrastructure Management and the government of Singapore's investment arm, GIC Special Investments.

With growing trade from China and stability of income flow, ports are becoming attractive investment opportunities at present. In March P&O were taken over by Dubai Ports World for a deal worth $6.8 billion (£3.68 billion).


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