News that were not reported in the local press

Dubai Ports World scuppers Singaporeans with 4bn pounds P&O bid

Dubai's DP World delivered a potential knockout blow in the contest to buy
the British ports group P&O last night, with a new offer worth 3.92bn
pounds.

The P&O board immediately recommended the 520p-a-share bid, having earlier
yesterday backed a 3.5bn pound offer from the Port Authority of Singapore.
That offer from PSA, worth 470p a share, had trumped an earlier agreed bid
from DP World pitched at 443p a share last year.

Nick LUff, the finance director of P&O, said the latest Dubai offer came in
yestereday afternoon and it was a "relatively easy decision for the board"
to back it. He pointed out that DP World, whose chairman is Sultan Ahmed Bin
Sulayem, had already received all regulatory clearances for its deal.

"This is a very attractive offer for our shareholders and it is about as
deliverable as you can get," Mr. Luff said.

The DP World bid comes at a hefty 71 per cent premium to the P&O share price
before its original approach. As both DP World and PSA are state-owned
entities that want to acquire P&O for strong strategic reasons, normal
financial considerations do not necessarily apply. So it is possible the
bidding war is not over.

Earlier in the day, some City sources had expressed surprise that PSA had
not gone for a more aggressive bid, though analysts believed it had the
capacity to increase its offer. DP World appeared to have pitched its bid at
a level calculated to try to deliever a killer punch.

Investors, lead by hedge funds, had read the situation well, with P&O shares
closing at 522p yesterday, well before DP World announced its move.

P&O, which owns ports around the world, is seen as the last independent
player available in the sector. The industry is led by Hong Kong's
Hutchison, with a 13 per cent market share, followed by PSA with 9 per cent,
Denmark's AP Moeller with 7 per cent and P&O with 5 per cent. So buying P&O
would enable PSA to leapfrog Hutchison to take the top slot.

The acquisition of the 168-year-old P&O by DP World would make it the No.3
player and thwart PSA's leadership ambitions. P&O has 29 ports, including
key assets in the fast-growing Asian economies.

A PSA-P&O deal would face some regulatory problems, especially at the port
of Antwerp, which the combined entity would control almost completely. If
the British company does end up with PSA, a break fee of 34m pounds would be
payable to DP World.

P&O will now press ahead with a shareholder meeting scheduled for 13
February, unless a competing offer worth 546p a share or more emerges. A
victory for Dubai would be the second time it has beaten Singapore in a bid
battle. In 2004, DP World paid US$1.15bn for the global port assets of the
US group CSX Corp, when PSA had reportedly bid US$1bn.

The Independent - 7th Jan 2006



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