Dubai Ports World Gains Rival In P And O Bid

by Robin Pilgrim, LawAndTax-News.com, London

12 January 2006

It emerged this week that UK ports and ferries firm, P&O (Peninsular & Oriental Steam Navigation Co.) has received another takeover bid, this time from PSA, a unit of the Singapore government's Temasek Holdings.

In December 2005, P&O announced that it had received a takeover bid from Dubai Ports World. The firm had not been seeking a takeover, but the GBP3.3 billion (or 443 pence per share) offer proved an attractive one.

According to the Dubai government-owned DP World, P&O would be run as a separate business, meaning that there are unlikely to be any job cuts at the firm, formerly the world's fourth largest ports group.

P&O shareholders had been expected to cast their votes on the DP World offer on January 20. However, the vote has been postponed until early February in order to allow for consideration of PSA's offer.

In a statement released on Tuesday, P&O confirmed that:

"The Board of P&O has received an approach from PSA International PTE Ltd ("PSA") whuich may lead to an offer to acquire the whole of P&O deferred stock at 470 pence in cash per unit."

"In addition, PSA also proposes to make an offer for the concessionary stock and the cancellation of the preferred stock on terms similar to the terms being made available by Thunder FZE, a wholly owned subsidiary of Ports, Customs and Free Zone Corporation, Dubai ("DP World")."

"PSA's proposal does not amount to a firm intention to make an offer and is subject to the following pre-conditions:

• completion of satisfactory due diligence;
• final PSA Board approval;
• the Board of P&O withdrawing its recommendation of the DP World offer and unanimously recommending the PSA offer (if made); and
• confirmation from the trustees of the P&O UK pension scheme that the funding arrangements to be proposed by PSA are acceptable."

The statement went on to add that:

"The Board of P&O has decided to allow PSA a limited period of time to satisfy its pre-conditions and put forward a formal offer. As a result, the Board intends to adjourn the stockholder and court meetings scheduled for 20 January, 2006 for approximately two weeks."

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