Forth Ports receives $1.2b takeover offer

Ten months after Forth Ports became involved in a takeover war against its largest shareholder, the docks company looks close to running up the white flag, following a takeover approach of US$1.2 billion priced at $26.39 a share from a European fund.


The offer for the would-be harbourside property developer came from the Arcus European Infrastructure Fund, formerly the European investment division of the Australian investor Babcock & Brown, reported The Times.


Arcus has held a 23 per cent stake in Forth for some time and used its holding to team up with Peel Ports and the Deutsche Bank property fund RReef - which between them held a further four per cent of Forth - to launch a shadow takeover bid last year.


That takeover approach was priced initially at $20.80 a share, but the consortium successively raised the offer to $21.69 a share and then $22.66 a share, the latter bid valuing the company at $1.03 million.


The last offer even included a financial instrument that had the intention of potentially valuing the offer at more than $22.66 a share, depending on the future value of Forth's riverside property interests at Leith.


Forth runs the strategically important Grangemouth as well as ports at Dundee, Burntisland, Methil, Leith, Rosyth and in the South, on the Thames at Tilbury.


As each takeover offer came in, the board of Forth, led by Charles Hammond, its chief executive, rebuffed the approaches and on each occasion refused to open talks with the consortium.


At the end of May, the consortium said that it was abandoning its offer.


This time, the takeover has been made solely by Arcus. Its advisers declined to make any comment on questions over whether Arcus is acting in any way in concert with Peel or with RReef, saying only that the consortium had been broken up and had ceased to exist after its final rebuff from the Forth board ten months ago.


The latest Arcus bid has been put forward as an indicative conditional offer for the shares in Forth that it does not already own.


In a statement, Forth said: "On the basis of this indicative approach, the board has agreed that Arcus can undertake certain confirmatory due diligence."


Despite a recent upturn in the group's shipping fortunes, Forth has always argued that its untapped potential and unrealised value lies not in its ports but in the potential of its development land on the Edinburgh waterfront.


It has coupled this potential with its plans to build biomass-fuelled electricity-generating plants on its port land and with the prospect of its ports becoming hubs to the Scottish wind and marine power industries.


Last year's takeover approach was complicated by the presence of Peel, the trading empire owned by the Isle of Man-based northern tycoon John Whittaker. His ports interests include Clydeport, Heysham, Liverpool, the Manchester Ship Canal, Medway Ports and container terminals in Belfast and Dublin.


Arcus already has a ports empire of its own, as the owner of Euroports, the largest dry ports operator in Europe that operates 20 terminals across the Continent. Its investments in British infrastructure also include the acquisition of Angel Trains, one of three companies that lease rolling stock to Britain's rail operators.
(Source:http://www.cargonewsasia.com)