singapore takes on dubai in bid - p&o
A battle between two nations. Singapore armed with forex reserves of over US$100 billion. Dubai armed with growing oil money. Whoever walks away from this battle front might turn to the battle for PRK. Singapore has Singapore Airlines and Dubai has Emirates Airlines to take control of Virgin Blue.
Singapore takes on Dubai in bid for P&O control By Richard Blackden, London January 12, 2006
SINGAPORE has unleashed a bidding war with Dubai in a bid to win control of giant British ports operator P&O, which runs one of Australia's two stevedores.
P&O Temasek Holdings, Singapore's state-owned investment company, has made a £3.5 billion ($A8.2 billion) offer for Peninsular & Oriental Steam Navigation Co, in an attempt to derail a bid by Dubai.
Temasek's PSA International, the world's second-largest port operator, has approached P&O, Britain's largest port operator, with a £4.70 a share offer, subject to the approval of P&O's board. Dubai offered £4.43 in November.
DP World, Dubai's state-owned port company, and Temasek's PSA are competing for more container terminals as demand from US and European consumers for low-cost Asian goods fuels trade growth.
DP World, which is based at the port of Jebel Ali south of Dubai city, said it was still committed to buying P&O and was considering its position after Temasek's approach.
Speculation that Temasek would bid has increased since it revealed on December 2 — two days after Dubai offered £3.3 billion — that it owned 4.1 per cent of P&O. The P&O board has endorsed the Dubai offer.
PSA is expanding into other parts of Asia, buying two terminals in Hong Kong from Hutchison Whampoa, the world's largest port operator, for $US925 million in June.
P&O, which generates more than half its volume from ports in Asia, will now postpone for two weeks a January 20 meeting at which investors were to have approved the DP world offer, to allow PSA to examine P&O's accounts.
P&O was founded in 1837 to transport mail from Britain to Spain. The port operator, which has sold off cargo-shipping and cruise-line businesses over the past five years, has expanded into Asia to tap rising trade flows. P&O's Asian terminals generated 58 per cent of group first-half operating profit.
Faster economic growth means that container volumes in Asia will outpace those in Europe, according to Drewry Shipping Consultants. The number of standard 20-foot containers shipped in Asia will increase 53 per cent over the next four years compared with 37 per cent growth for Europe, Drewry says.
Deutsche Bank is advising DP World and UBS AG is advising Temasek. Citigroup and Rothschild are advising P&O.
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