Singapore in $9bn P&O bid

British ports and ferries group P&O has received a 3.5 billion ($9 billion) bid approach from Singaporean state-owned port operator PSA International, trumping an agreed offer from Dubai Ports.

P&O said yesterday that the approach from PSA, owned by Singapore government investment agency Temasek, valued its stock at 470p a share, compared with an earlier offer of 443p a share from Dubai Ports in a deal agreed last November.

A tie-up with P&O would give PSA greater access to markets in Europe, India, Australia and the United States, though it would probably be forced to sell some assets in the Dutch port of Antwerp for competition reasons, one analyst said.

The offer is at a 6 per cent premium to Dubai Port's offer but only a penny above P&O's closing share price yesterday after a 2.6 per cent rise during the day. The stock has risen by more than 50 per cent since news of Dubai Port's offer in November.

The global ports industry has been consolidating in recent months as shipping markets have basked in a three-year boom on the back of blistering growth in Chinese demand, a global economic recovery and expanding international trade.

Dubai Ports said it remained committed to the successful completion of its agreed 3.3 billion deal and urged P&O shareholders to hold tight for now. A source said Dubai Ports would wait to see if PSA submitted a formal offer before contemplating raising its bid.

Temasek owns 4.1 per cent of P&O, whose full name is Peninsular & Oriental Steam Navigation, the world's fourth-largest ports group.

P&O said the offer from PSA was subject to the Singaporean group conducting due diligence and receiving the unanimous recommendation of the board.

P&O had been due to call a shareholder meeting to vote on the Dubai offer on January 20 but said it had delayed the meeting for two weeks to give PSA, the world's second-biggest port operator, enough time to decide whether to make a formal bid.

Another source said PSA would begin sifting through P&O's books as soon as possible with a view to making a firm offer within weeks.

- REUTERS