Dubai 'poised to make £3b buyout bid for P&O ports'

Dubai Ports World, the world's sixth-largest port operator, is set to make a £3 billion bid this week to take over P&O, Britain's biggest ports and ferries group, the Sunday Times News Service reported from London yesterday.

The news service said Dubai Ports World (DPW), owned by the Dubai government, had hired Deutsche Bank to advise it on a bid.

It quoted banking sources in Dubai as saying on the weekend that a preliminary meeting between the two sides was likely to take place within days.

Dubai Ports had contacted banks about financing a bid for the British ports operator. A stock-exchange announcement confirming its interest may be made today, it added.

Both, Dubai Ports and Deutsche Bank, said they had no comment to make.

DPW, formed only a month ago from the combination of the Dubai Ports Authority and Dubai Ports International, has interests spanning 15 terminals across 13 locations.

It is keen to acquire P&O to strengthen its position in the rapidly consolidating global ports industry. P&O owns 27 container terminals and had logistics operations in 18 countries. It also has port operations in Africa and Australia as well as operations in India, the Philippines and Sri Lanka.

The news service said that an approach from DPW was almost certain to set off a bidding war for P&O, with Temasek, the Singaporean state investment firm, and Danish shipping group AP Moeller-Maersk among other likely predators.

Dubai Ports World is expected to try to persuade P&O's management that the long-term investment required for modern port development would be best done by a private rather than a quoted group.

A takeover would mark the end of a long restructuring process at P&O which has included the disposal of its 25 per cent stake in the shipping firm P&O Nedlloyd, its golf-club and exhibition-centre assets, and the sale of its refrigerated logistics arm.

The future of P&O's ferries business has also been the subject of speculation in recent months.

Earlier this year, Dubai Ports International paid $1.142 billion in cash, before working capital and long-term debt adjustments, to buy the international terminal business of CSX.