Post by ferryfast admin on Feb 11, 2006 1:21:08 GMT -5
Dubai wins P&O for $6.9b
BY AHMED A. ELEWA (Deputy Business Editor)
11 February 2006
DUBAI — For the second time in less than 15 months, Dubai Ports World (DPW), outbid Singapore's PSA International for port assets. Yesterday, Dubai won a three-month contest for Peninsular & Oriental Steam Navigation Company (P&O), the UK's largest port operator, after Singapore withdrew.
DPW's revised offer, which values P&O at £3.92 billion (5.7 billion euros, $6.9 billion), was enough to see off the bid from PSA, which is owned by state-linked Singapore investment firm Temasek Holdings.
"Following the revised proposals for the acquisition of P&O from DPW at a price of 520 pence per unit of deferred stock, PSA has decided not to increase its offer and will therefore no longer pursue the acquisition of P&O," PSA said in a statement.
The statement said P&O offered "an attractive opportunity" to expand the Singapore firm's global portfolio but "we also believe the price we have offered at 470 pence represented a full and fair value."
It said that for PSA to pay more than this price "would not be compatible with commercial business sense and PSA's future success."
P&O's response: P&O gave its full backing yesterday to the takeover by DPW after PSA abandoned the bid.
"The P&O directors recommend unanimously the DPW's revised offer and look forward to putting it to stockholders," P&O chairman John Parker said in an official response to PSA's decision to pull out.
"The combination of P&O and DP World has compelling strategic logic and will create significant opportunities for both businesses and their employees."
The meetings to consider the DP World Scheme will commence at the Wembley Conference Centre at 2:00pm on Monday.
Dubai ranks second: Upon acquiring P&O, DPW would get a 9.3 per cent share of global container throughput — just a notch above PSA's 9.2 per cent.
But both firms would remain behind Hutchison Whampoa, which commands a 13.3 per cent global market share.
P&O has an estimated 6 per cent share of global container throughput — placing it a distant fourth behind Hutchison, PSA, and APM Terminals of Denmark — but the British firm has a strong footprint in Australia and India which its rivals lack.
Confident: DP World is confident of securing UK ports and ferries group P&O in a shareholder vote on Monday, the group's chairman said yesterday.
"We are waiting for the shareholder vote. Yes, we are confident, we have always been confident," Sultan Ahmed bin Sulayem told Reuters by telephone in Dubai.
Challenges ahead: In an article published in Business Times last month, Khaleej Times' Business Editor outlined the challenges that lie ahead for DPW, if the bid is to succeed. These challenges include the pressure to dispose of P&O Ferries unit to recoup the hefty premium.
It is also difficult to rationalise the strategic fit of P&O Ferries with DPW's existing focus on its global ports business. Most important is the issue of DPW's ability to digest the P&O acquisition. With root differences in management culture, it will necessitate a broader set of skills than those required for the acquisition of CSX Terminals.
It will also call upon DPW's ability to restructure and integrate a listed company of the scale of P&O. In addition it should ready itself for the significant regulatory demands of the UK.
BY AHMED A. ELEWA (Deputy Business Editor)
11 February 2006
DUBAI — For the second time in less than 15 months, Dubai Ports World (DPW), outbid Singapore's PSA International for port assets. Yesterday, Dubai won a three-month contest for Peninsular & Oriental Steam Navigation Company (P&O), the UK's largest port operator, after Singapore withdrew.
DPW's revised offer, which values P&O at £3.92 billion (5.7 billion euros, $6.9 billion), was enough to see off the bid from PSA, which is owned by state-linked Singapore investment firm Temasek Holdings.
"Following the revised proposals for the acquisition of P&O from DPW at a price of 520 pence per unit of deferred stock, PSA has decided not to increase its offer and will therefore no longer pursue the acquisition of P&O," PSA said in a statement.
The statement said P&O offered "an attractive opportunity" to expand the Singapore firm's global portfolio but "we also believe the price we have offered at 470 pence represented a full and fair value."
It said that for PSA to pay more than this price "would not be compatible with commercial business sense and PSA's future success."
P&O's response: P&O gave its full backing yesterday to the takeover by DPW after PSA abandoned the bid.
"The P&O directors recommend unanimously the DPW's revised offer and look forward to putting it to stockholders," P&O chairman John Parker said in an official response to PSA's decision to pull out.
"The combination of P&O and DP World has compelling strategic logic and will create significant opportunities for both businesses and their employees."
The meetings to consider the DP World Scheme will commence at the Wembley Conference Centre at 2:00pm on Monday.
Dubai ranks second: Upon acquiring P&O, DPW would get a 9.3 per cent share of global container throughput — just a notch above PSA's 9.2 per cent.
But both firms would remain behind Hutchison Whampoa, which commands a 13.3 per cent global market share.
P&O has an estimated 6 per cent share of global container throughput — placing it a distant fourth behind Hutchison, PSA, and APM Terminals of Denmark — but the British firm has a strong footprint in Australia and India which its rivals lack.
Confident: DP World is confident of securing UK ports and ferries group P&O in a shareholder vote on Monday, the group's chairman said yesterday.
"We are waiting for the shareholder vote. Yes, we are confident, we have always been confident," Sultan Ahmed bin Sulayem told Reuters by telephone in Dubai.
Challenges ahead: In an article published in Business Times last month, Khaleej Times' Business Editor outlined the challenges that lie ahead for DPW, if the bid is to succeed. These challenges include the pressure to dispose of P&O Ferries unit to recoup the hefty premium.
It is also difficult to rationalise the strategic fit of P&O Ferries with DPW's existing focus on its global ports business. Most important is the issue of DPW's ability to digest the P&O acquisition. With root differences in management culture, it will necessitate a broader set of skills than those required for the acquisition of CSX Terminals.
It will also call upon DPW's ability to restructure and integrate a listed company of the scale of P&O. In addition it should ready itself for the significant regulatory demands of the UK.