Dubai: Although Dubai Ports World has offered a "hard to beat" price to acquire P&O, it cannot be certain about closing the deal yet.
Dubai should soon expect a higher bid from rival Port of Singapore Authority (PSA), analysts told Gulf News yesterday.
John Lawson, of Investec Securities in London, said: "We are getting close to the end-game scenario, but [we believe] there will be one more round of bidding." Lawson expects PSA, which is owned by the Singapore government's investment arm Temasek, to raise its bid before the scheduled P&O shareholders meeting on February 13.
Who will pay more?
The meeting has been called to approve Dubai Ports' £3.88 billion (Dh24 billion) offer. Dubai outbid Singapore on January 26 by offering 520 pence for each P&O share compared to PSA's offer that valued each stock unit at 470 pence. Dubai has also persuaded the P&O board not to consider any new bid below 546 pence, but PSA will remain in the fray if it raises the price above 520 pence.
"Ultimately it is for the shareholders of P&O to decide," Lawson said.
In a bidding war, the final price may reach 550 pence per share, he added.
"Both companies want the (P&O) business and both are prepared to bid higher than normal investors," Lawson added.
Neil Davidson, director of research at Drewry Shipping Consultants, also believes that Dubai has not dealt the knock-out blow to PSA yet.
"We have to wait and see. It is certainly a strong bid and a hard price to beat," he said of the Dubai offer.
"The ball is in Singapore's court. We have to see who is prepared to pay more," Davidson added.
PSA, which holds about four per cent of P&O shares, will still make higher returns on its investment, even if fails to take over P&O.
