Business | Shipping
Buyer expected to sell off P&O ferries
British port operator Peninsular &Oriental Steam Navigation Company (P&O), which is being sought by Dubai Ports World and Singapore, could see its breakup after a takeover.
- By Shakir Husain, Staff Reporter
- Published: 00:00 January 16, 2006
Dubai: British port operator Peninsular & Oriental Steam Navigation Company (P&O), which is being sought by Dubai Ports World and Singapore, could see its breakup after a takeover.
Irrespective of who the buyer is, P&O would inevitably see a "streamlining" process under which P&O's ferries business could be sold off, said Frank Kennedy, a Dubai-based shipping consultant.
While Dubai Ports remains committed to the completion of its agreed £3.3 billion deal, Singapore port operator PSA International has raised the stakes for Dubai by entering the fray with its recent £3.5 billion approach to buy the British ports and ferries group.
"It is extremely likely that the ferries side of P&O would be sold off after the takeover process," Kennedy said.
Tentative deals
He added that any company, including Dubai Ports World, that acquires P&O would "probably offload" the ferries business.
The Sunday Times reported yesterday that PSA had reached tentative agreements with Denmark's AP Moeller Group and International Container Terminal Services of the Philippines to buy P&O assets that were not core to its strategy.
The report said a post-takeover sell-off would help PSA cover its acquisition costs and pre-empt any directive from Brussels to shed some P&O assets in order to secure approval from EU fair competition authorities.
PSA's plans to break up P&O even before making a formal offer for the company could be part of a strategy to improve its chances in the takeover bid, Kennedy said.
Although Dubai Ports has not publicly stated whether it would improve its offer for P&O, analysts predict a bidding war between Singapore and Dubai for the control of the British port operator.
More from Shipping
More from Business
Business Editor's choice
-
Do unemployment figures flatter to deceive?
Jobseekers and recruiters give out mixed signals ranging from optimism to downright despair even as official data show recovery
-
Banks can increase their share
Longer opening hours, more locations outside cities and lower charges can help
-
Geepas idea blossomed in Dubai
The journey led from a small shop in Bahrain to a $1.27b company in the UAE
