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Discussion Starter · #1 ·
Bidding war for P&O as Dubai Ports World launches takeover
By Saeed Shah
31 October 2005
The Independent

P&O, the ports and logistics group, has received a takeover approach which could be worth up to £3bn from Dubai Ports World.

It is thought that the move could set off a bidding war for P&O, the only publicly-listed global ports operator. Rivals covet its scarce waterfront assets in a business that has consistently grown faster than global GDP, as a result of the strong expansion of world trade.

Other possible bidders include the Singapore ports company Temasek, the Danish shipping giant AP Moeller-Maersk and Hong Kong's Hutchison Whampoa.

The iconic British group, which is the fourth-largest ports operator in the world, said in a statement: 'P&O confirms that it has received a very preliminary contact from a third party, which may or may not lead to an offer for the company.'

P&O declined to say anything further. Both DPW and its financial adviser, Deutsche Bank, refused to make any comment.

It is understood that no firm proposal has been put forward by DPW and the 'contact' between it and P&O so far has not been substantial.

P&O has 27 container terminals and logistics operations in more than 100 ports, with a presence in 18 countries. Its main service is containerised cargo handling, based on long-term contracts to operate terminals in ports. The British government this year granted conditional approval to the company's plans to invest £1.5bn in developing a deep water container port and a logistics business in the 'London Gateway' area at Thurrock, Essex.

DPW is owned by the Gulf state's government and therefore its ruling family. That means that it is unlikely to have problems funding the deal. Dubai is the world's tenth-largest port.

Earlier this year, DPW bought the US group CSX Corporation for $1.15bn (£640m) to become the world's sixth-largest port operator. CSX's international terminal business comprises of nine terminals with 24 berths. The acquisition provided DPW with access to new growing markets in Asia and Latin America, which are forecast to offer the highest volume growth in the port industry. This included important bases in Hong Kong, China and South Korea.

The ports sector is going through a consolidation phase globally. Even within the UK, PD Ports announced this month that it had received a takeover bid. Earlier this year, Mersey Docks was bought by Peel Holdings.

In July P&O appointed a new chairman, Sir John Parker, replacing Lord Sterling, who had led the company since 1983. It has also just bolstered its team of non-executive directors, including the addition of Mike Turner, the chief executive of BAE Systems, and Baroness Symons, a former government minister.

DPW, led by its executive chairman Sultan Ahmed Bin Sulayem, is likely to try to convince Sir John that the long-term investment required to develop ports is not suited to the public arena. P&O will probably point out that ports offer good organic growth opportunities.

It is unclear whether DPW would be interested in all P&O's other businesses " it also has a ferries business, which has suffered from difficult trading conditions in recent years, and a logistics arm that transports goods that need to be refrigerated.

Last week, P&O warned that slowing UK economic growth had hit profits at its ports in Tilbury and Southampton.

From imperial icon to auction block

Founded 170 years ago, the Peninsular & Oriental Steam Navigation Company was once the largest and most varied shipping business in the world.

It played a key role in the British empire, taking passengers and mail to Britain's far flung overseas possessions. Its ships also played important roles in both World Wars, carrying troops, munitions, raw materials and food (it lost 182 ships in the Second World War).

The Peninsular in the company's name signifies its origins, as a provider of steamers between Britain and the Iberian peninsula. This included running guns and transporting troops for the royalist sides " whose colours are featured in the company's famous flag " during the internal wars in Spain and Portugal in the 1830s.

It landed its first mail contract in 1837 to Spain and Portugal, adding a route to Alexandria, Egypt in 1840, at which time it took Oriental into its name. Services expanded to Calcutta in 1843 and to Sydney in 1852.

Between 1914 and 1946, P&O acquired more than a dozen other shipping companies and by the 1920s, it operated nearly 500 ships.

It is said that P&O invented the leisure 'cruise', offering its first cruise programme in 1904. In 1974, it acquired the Los Angeles-based Princess Cruises, adding Sitmar cruises line in 1988.

From the 1960s, jet airliners took over P&O's traditional passenger business and its container shipping grew. In the mid-1960s, the group began to invest in roll-on roll-off ferries between England and the Continent.

Later, under the chairmanship of Lord Sterling, the company diversified further, buying the Earl's Court and Olympia exhibition centres. But in 1999, P&O began selling non-core businesses and the company is now primarily a ports operator and logistics operator.

147,656 Posts
Discussion Starter · #2 ·
Dubai Ports to buy Britain's P&O for $5.7 bln
By Michael Smith and Dayan Candappa

LONDON/DUBAI, Nov 29 (Reuters) - State-backed Dubai Ports World agreed to buy UK ports and ferries group P&O for 3.3 billion pounds ($5.7 billion) on Tuesday, creating the world's third-largest ports company.

Dubai Ports offered 443 pence per share in an all-cash bid for P&O, a 165-year-old maritime icon formed at the height of Britain's sea power, as part of an ambitious expansion strategy for Asia and Europe.

The Gulf company's offer price was a 46 percent premium to P&O's trading price before Oct. 30 when P&O confirmed it had been approached by a potential bidder.

P&O shares were up 0.7 percent at 438 pence at 1404 GMT.

The deal follows a string of recent takeovers of major British companies. It is also the latest big purchase by Dubai-government-linked firms scouring the globe for assets to invest the Gulf emirate's mountain of oil cash.

"I think this is an acceptable price. There is a lot of potential and brand value in the P&O assets, and Dubai Ports is well positioned to exploit it," said Wadah Al Taha, a senior economic analyst at a bank in the neighbouring emirate of Abu Dhabi.


The Dubai Ports-P&O operation will be the world's third-largest ports operator after Hong Kong's Hutchison Whampoa at No.1 and Singapore government investment agency Temasek Holdings Pte. Ltd. in second place, it said.

Analysts said a rival bid now appeared unlikely. Hutchison, Temasek and Denmark's Moeller-Maersk had been rumoured as potential counter bidders.

"P&O's board has unanimously recommended the offer and together with provisional acceptances for 19 percent of the group's shares a counter offer is unlikely," Investec analyst John Lawson said.

Dubai Ports, created by the merger of two state-owned entities in September, said it planned to retain P&O's management, staff and its UK-France ferries business. It said the deal was about expansion rather than cost-cutting.

"This clearly fits into the broader strategic picture given Dubai's ambitions to position itself as a hub, not just of shipping but of business," said Zahed Chowdhury, Head of Research, HSBC, Dubai.

Analysts and Dubai Ports executives said they did not anticipate any regulatory opposition. The deal is expected to be wrapped up by the first quarter of next year.

P&O Chairman John Parker said the company had not received any rival approaches from third parties but it was too early to speculate.

P&O, whose full name is Peninsular & Oriental Steam Navigation Co., earns about 80 percent of its profits from ports in Asia, the Americas and Europe.


The company is the world's fourth-largest ports group, and its brand-name still appears on cruise ship operations it no longer owns.

Dubai Ports Chairman Sultan Ahmed Bin Sulayem, one of Dubai's most powerful businessmen, told reporters on a conference call the deal included ownership of P&O's less-profitable UK-France ferries business.

P&O would remain headquartered in London, and Chief Executive Robert Wood would stay on as chief, he said.

P&O also expects UK government approval for a 1.5-billion-pound container port and business centre near London by early next year.

"We are very bullish about this acquisition. We have always been in growth mode and we will continue to do this," bin Sulayem told reporters, tipping further expansion in India and Europe.

One of the sticking points in talks had been P&O's pension deficit. Dubai Ports agreed to inject 125 million pounds into the UK firm's pension scheme, leaving a deficit of 75 million pounds to be paid over five years.

Dubai Ports said it would finance the deal through a combination of debt and equity.

Dubai Ports' previous major acquisition was in December 2004 when it paid $1.15 billion for the global port assets of U.S.-based CSX Corp..

Deutsche Bank was financial adviser and corporate broker for Dubai Ports on the deal. Citigroup and Rothschild advised P&O. Citigroup and Morgan Stanley were corporate brokers to P&O.

147,656 Posts
Discussion Starter · #3 ·
Shipped somewhere east of Suez - P&O
3 December 2005
The Economist

Another famous British company is sold to foreigners

FOR those who mourn the demise of an empire built on maritime might, the agreed takeover of P&O by Dubai's DP World for £3.3 billion is a sad moment. Two hundred years after the battle of Trafalgar sealed Britain's naval supremacy, the Peninsular and Oriental Steam Navigation Company, once a sinew of empire linking Britain to India and points further east, is falling into the hands of a former colony. If the deal goes through, what was once a crucial pillar of the British business establishment will henceforth be owned by a trucial state, as the United Arab Emirates (including Dubai) was known until 1971. That is when the British pulled out, in the general retreat from empire.

P&O is just the latest in a long line of big British companies that have been bought by foreigners recently, as the table shows. France's Pernod Ricard swallowed Allied Domecq, a leading drinks group. Spain's Telefónica is buying O2, once the mobile-phone arm of BT; Saint-Gobain, a French glass group, is about to take over BPB, a maker of plasterboard; and Deutsche Post is buying Exel, a transport and logistics firm. What makes Britain so attractive?

Start with the fact that its government keeps out of the way of foreign bidders. Countries such as France and Germany make it very clear that foreigners are not always welcome. France even has a list of nine “strategic” industries that are off-limits to outsiders. Officials there left Pepsi in little doubt recently that any attempt to buy Danone, its yoghurt-making national champion, would be badly received. Italy has similarly thrown sand in the wheels of bids by foreign banks for domestic ones.

British firms have other attractions too. They are relatively cheap; they are often cash-rich; they tend to have an international spread of business; and they fit more easily into the Anglo-Saxon culture of international business than do, say, prickly French or obdurate Germans.

The particular attractions of P&O have little to do with its past. The firm began diversifying in the 1970s to become a rather dull conglomerate, moving into construction and exhibitions halls including London's Olympia and Earls Court. Since then, P&O has steamed away from shipping, its core of yore. It merged its container business with a Dutch firm, Ned- lloyd Lines, in 1996, and spun off its cruise business, later bought by America's Carnival. A cross-channel ferry service, loss-making when last inspected, is the only remaining vestige of P&O's once vast fleet of passenger and cargo vessels. Instead, it has sought safe harbour in the ports business. Just as airports make more money than airlines, so ports are good solid businesses, often enjoying a sort of monopoly that allows them to profit when (as now) shipping is buoyant, without plunging into the troughs when it isn't.

The main prize that DP World wants to acquire is P&O's network of container ports around the world. For this it is prepared to pay 46% more than the company's shares were worth before takeover talks were acknowledged publicly, and to contribute £200m towards closing P&O's gaping pension deficit.

Dubai wants to become a leading international hub for transport of various sorts: it has already achieved this in aviation, and is working at it in shipping. Sending containers through a central hub allows ships to pick up cargo at smaller ports for a variety of destinations. At the hub port the containers can be consolidated with other cargoes bound for the same destinations, so that fewer and larger ships transport the goods more cheaply. Success depends on controlling a network of feeder ports.

P&O will bring DP World lots of those: 29 ports around the globe. The British firm also has plans to build Thames Gateway, a big new container port just outside London. And its ports are mainly modern and well run. All this has made it irresistible to DP World in a sector where few other big tempting targets can easily be purchased. The combined group will move into third place in terms of traffic through a main port—ahead of APM, part of the Maersk shipping group, though still lagging behind Hutchison Ports of Hong Kong and Singapore's PSA.

DP World began expanding before talks with P&O looked likely to get anywhere. Earlier this year it bought CSX World Terminals, an American port operator. It has branched out around the Persian Gulf and, more recently, in Romania, India and South Korea. But buying an international British group projects it for the first time on to a world stage. Which is pretty much why other British firms are so attractive to foreign buyers. The empire may be long gone, but the legacy lingers on.

147,656 Posts
Discussion Starter · #4 ·
Dubai World to boost port operations 50% in 3 yrs
By Natsuko Waki

DAVOS, Switzerland, Jan 26 (Reuters) - State-owned Dubai Ports World plans to boost the number of containers it handles by 50 percent in the next three years, its Chairman Sultan Ahmed bin Sulayem told Reuters.

Sulayem said Dubai World -- DP World's owner which he also heads -- will soon buy a hotel in Paris under its broad-based expansion plan, and he sees U.S. assets as very attractive even after a political row last year over its U.S. operations.

DP World took over facilities at six major U.S. ports when it bought Britain's P&O for $6.8 billion in February, becoming the world's third-largest container port operator. It agreed to sell its U.S. operations to an American International Group unit in December after relinquishing control to allay concerns about U.S. national security.

"(On any Dubai World investment) we are looking at the IRR (internal rate of return) of 20 percent in five years and that's on whatever cash we put in," Sulayem said on the sidelines of the World Economic Forum in an interview late on Thursday.

"We expect to grow... our port operations. Our ability to handle cargoes, whatever we have now, we expect to grow by 50 percent in the next three years," he said, adding that the growth target also included the number of containers it handles.

Sulayem said Dubai Ports now has 52 ports with eight under construction. "In a few years, all will be operational and with an expansion of lands that would generate more business. That's 15 percent (growth) every year."


Sulayem saw more opportunities in the United States even after the ports row.

"The United States is a very attractive market. Bear in mind (the sale of the U.S. operation) didn't stop us to invest. After we decided to sell (in March), we invested almost $2 billion in real estate, (and the) retail sector, in the U.S.," he said.

"The U.S. is the major ally. There is huge cooperation between the governments. There have been maybe some events (related to protectionism) but ... whether there is protectionism or not, we go after opportunities."

Istithmar, an investment arm of Dubai World, has been buying up U.S. property and other assets aggressively this year. It acquired retailer Loehmann's in July, the Knickerbocker Hotel in New York in June, and office block 280 Park Avenue in April.

Sulayem said Dubai World is not planning to sell any of its operations at the moment. Instead, he said: "We are about to buy a hotel in Paris." He declined to name the hotel.

To finance its expansion projects, Sulayem said he was more inclined to borrow. "We talked about (an) IPO but we do it to meet financial commitment with banks. But we never said that's the only way -- there is an IPO, bonds...," he said.

"We haven't decided which way. We are evaluating. Whichever is cheaper. We have more appetite for bonds. Banks are willing to lend their money. It's less complicated than (an) IPO."

422 Posts
P&O Ports (owned by Dubai Portsworld) owns the CenTerm containter terminal in Vancouver. Since Dubai Portsworld bought CenTerm they have invested more than $200 million dollars expanding the terminal, including its physical size and an addition of two or three more cranes and a number of those TEU gantries.

147,656 Posts
Discussion Starter · #6 ·
Dubai Ports eyes $1 bln minority stake sale -paper

DUBAI, April 30 (Reuters) - State-owned Dubai Ports World is considering selling a minority stake to raise around $1 billion and has hired Deutsche Bank and Dubai-based Shuaa Capital as advisers, London's Times newspaper said.

The owner of British ports operator P&O is also considering a refinancing plan as an option, the paper said in a report on its Web site on Monday, without making clear how it got the information.

At least some of the shares would be listed on the Dubai International Financial Exchange, the Times said, referring to a bourse the Gulf Arab emirate set up in 2005 to encourage foreign firms to raise capital in the world's top oil exporting region.

"In the event of a partial float, the Dubai Government would retain control of the group, selling a minority stake. Under such a scenario, it is thought that DP World would be seeking to raise around $1 billion from the float," the paper said.

"It is understood that DP World, the world's third-largest ports group, is keen to reach a decision by the autumn."

Dubai Ports said in 2005 it was planning an IPO within two years. The company's owner, the Ports, Customs and Free Zone Corporation, has issued a $3.5 billion Islamic bond, or sukuk, convertible into shares in any IPO of its subsidiaries.

The company hired Shuaa, Deutsche Bank, Merrill Lynch , and Dubai Islamic Bank to advise on the offering, a spokeswoman said in May.

Dubai Ports won a bidding war for P&O with a $6.8 billion offer in 2005, although a political storm in Washington over security concerns forced it to relinquish control of P&O's assets in the United States.

Shuaa Capital could not be reached for comment. A spokeswoman at Dubai Ports declined to comment.

1 Posts
P&O Ports (owned by Dubai Portsworld) owns the CenTerm containter terminal in Vancouver. Since Dubai Portsworld bought CenTerm they have invested more than $200 million dollars expanding the Worldwide brands dropshipping, including its physical size and an addition of two or three more cranes and a number of those TEU gantries.
I really like Dubai,It is beautiful city,But I dont have so much money to travel.

147,656 Posts
Discussion Starter · #8 ·
DP World set for 'relatively stable financial performance' this year, chairman says

DUBAI, Oct 26 (Reuters) - International port operator DP World is on track to report a "relatively stable financial performance" this year after the recording a 3.1% increase in third-quarter shipping container volumes, its chairman said on Monday.

The Dubai state-owned company, which reported contractions in container volumes in the first two quarters, handled 18.3 million containers in the July - September period, it said.

The 52.2 million containers handled in the first nine months of the year were down 2.5% compared with the same 2019 period.

More : DP World set for 'relatively stable financial performance' this year, chairman says
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