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Consortium considers bid for AB Ports Speculation puts possible offer at GBP2.3bn(The Herald Via Thomson Dialog NewsEdge)ASSOCIATED British Ports, the UK's biggest ports operator, yesterday emerged as a GBP2.3bn bid target. A consortium including Goldman Sachs and investment groups from Canada and Singapore said it was considering a possible offer for the company. The US investment bank has teamed up with Borealis, the investment vehicle of Ontario pension fund Omers, and GIC Special Investments, the private equity arm of Singapore government's investment corporation. AB Ports has operations at 21 UK sites, including Ayr, Troon, Hull, Southampton and Grimsby. The company employs 28 people at its two Scottish bases and more than 3000 staff world-wide. Overseas operations include Amports, a US-based vehicle processing company. The consortium, codenamed Project Admiral, did not mention a price in an announcement to the London Stock Exchange. However, press speculation put the potential bid at GBP2.3bn - or 740p a share. ABP said it "noted" the announcement but said it has not yet received any approach. News of the consortium's interest initially sent shares in AB Ports 5-per cent higher, before the price settled 3-per cent, or 21p, up at 717p by the close. The consortium's interest is but the latest expression of takeover fever involving an operatorof key UK transport infrastructure, following the GBP9bn move for BAA from a Spanish-led consortium. Other recent moves in the European ports industry include Gulf state-backed Dubai Ports World's dollars-6.8bn takeover of P&O. Last June, Mersey Docks & Harbour agreed a GBP771m takeover by Peel Ports and Teesport operator PD Ports was swallowed by Australian infrastructure group Babcock & Brown for GBP260m. AB Ports impressed the City recently with a better-thanexpected 2-per cent rise in annual operating profits to GBP132.3m. The company has underpinned its prospects by looking to secure more long-contracts, including through development work on the Humber. Two major projects due to become operational at the Port of Immingham in the coming months are likely to bring higher growth in the second half of the current financial year. The two schemes, which involve investment of GBP87m, are on schedule and will provide a roll-on roll-off ferry facility and an extension to Humber International Terminal, one of the UK's main coal import facilities. A third major project on the Humber - a GBP30m container terminal for short-sea traffic - is due to become operational at the end of next year. The ports and transport business accounts for 88-per cent of profits, topped up by property trading. Analysts believe the company, which owns a large property portfolio, may be planning to convert its property holdings into a tax-saving real estate investment trust following confirmation of the scheme in last week's Budget. A number of rival bids are also expected to emerge forAB Ports, some industry observers believe. In a research note, investment bankDresdnerKleinwort Wasserstein commented: "Given its number one market position in the UK, strong cashflows, available financial headroom and further potential to exploit significant property holdings, we believe the assets are attractive to third parties." |