NOL, Hamburg consortium only bidders left for Hapag-Lloyd

Singapore's Neptune Orient Lines provided confirmation Friday that it has been invited to continue into the next phase of the bidding process for the sale of the Hapag-Lloyd container shipping business.

NOL will vie with a Hamburg-based consortium for Hapag-Lloyd, the container shipping division of TUI. 

NOL submitted an indicative non-binding bid to acquire Hapag-Lloyd to the company's owner TUI AG on July 21, NOL said in a statement. Any agreement would be subject to, among other steps, due diligence, submission and acceptance of NOL's final bid, regulatory approvals and NOL shareholders approvals. If successful, NOL would integrate its APL container shipping business with Hapag-Lloyd, which would create the world's third-largest container carrier. A Reuters report Aug. 7 said that NOL and a group of Hamburg investors were the only ones left standing in the race for Hapag-Lloyd. 

NOL was a little bit reluctant to be as precise as it should be considering the current phase of the bid, analyst Heino Ruland at Frankfurt Finanz told the news agency. NOL doesn't appear to be as sure about the bid as it was before. I doubt they are going to aggressively bid for Hapag-Lloyd against the Hamburg group...especially in this environment. NOL yesterday reported profits in the second quarter but the earnings were down 19 percent from the first quarter, with Group President Ron Widdows indicating the second half of 2008 could be difficult for carriers.

Ruland told Reuters that he believes the Hamburg group抯 bid would be more palatable for TUI as it would allow the shipping business to remain in German hands, although the financing and size of the two bids were unclear.

NOL hasn't released details of its bid, saying that while the process is underway, NOL will be bound by strict confidentiality undertakings, which legally restrict the company's ability to share information. However, Reuters reported that analysts estimate the Hapag-Lloyd unit could be worth $7 billion, more than twice NOL's $2.9 billion stock market value.

Source: American Shipper