Goldman wins British Ports bid

Pressured by a string of failed bids, Goldman raised its offer for ABP to $8.41 billion. Picture / Reuters

LONDON - A Goldman Sachs-led consortium beat out Australia's Macquarie Bank in an auction for Associated British Ports after raising its cash offer for the group to £2.795 billion ($8.41 billion).

Admiral Acquisitions, the Goldman Sachs consortium, said AB Ports had recommended a revised £9.10 per share offer, 8.3 per cent higher than its previous offer of £8.40.

"The boards of directors of Admiral and ABP announce that after a competitive process they have reached agreement on the terms of recommended revised proposals for the acquisition of the entire issue and to be issued share capital of ABP by Admiral," a statement e-mailed by Goldman Sachs said.

It said that AB Ports directors intended to unanimously recommend the latest Admiral offer, which they considered to be "fair and reasonable".

However, a rival consortium led by Macquarie told AB Ports shareholders to take no action over the increased Goldman bid.

Macquarie said its grouping was "considering its position and a further announcement would be made in due course".

Goldman agreed an £8.10 offer on June 14 for the group, which operates 21 UK ports, handling about a quarter of the country's seaborne trade, before raising the stakes to £8.40 in an attempt to test the resolve of the Macquarie consortium.

Macquarie followed up with an informal bid approach, proposing to at least match the £8.40 offer.

Goldman is under pressure to complete a deal after a string of failed bids, including for airports group BAA, broadcaster ITV and pub company Mitchells & Butlers.

Port groups have become attractive targets due to their stable income streams and property assets and with shipping markets buoyant on the back of growth in world trade.

In March, Dubai Ports World completed a US$6.8 billion ($11.1 billion) takeover of P&O after a bidding war with Singapore's PSA International.

The Admiral group is 33 per cent owned by Canada's Borealis Infrastructure, the investment vehicle of Ontario pension fund OMERS; 33 per cent by GIC Special Investments, the private equity arm of the Government of Singapore Investment Corporation; 23 per cent by Goldman Sachs; and about 10 per cent by the Prudential Group's Infracapital Partners.

Admiral said around £1.427 billion for its bid would come from consortium members and the rest from a loan arranged by Royal Bank of Scotland.

The two parties had agreed to increase the break fee payable to Admiral if AB Ports pulled out to 1 per cent of the offer value on a fully diluted basis under the acquisition.

- REUTERS