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U.K. OKs Dubai Takeover of Firm

Britain's High Court approved the takeover of British shipping company Peninsular and Oriental Steam Navigation Co. by Dubai's state-owned DP World on Thursday, despite a last-minute objection by a U.S. company.

Justice Nicholas Warren dismissed the appeal from Miami-based cargo handler Eller & Co. as he gave the required go-ahead for the 3.9 billion pound ($6.8 billion) deal.

"The objections of Eller do not persuade me that I should not sanction the scheme," Warren said.

Eller had argued that U.S. concerns about a United Arab Emirates company owning significant operations at six major U.S. seaports could substantially harm its business.

The proposed deal has caused consternation among some lawmakers and businesses in the United States.

The judge said he took into account U.S. concerns.

"I have been treated to a large amount of evidence on press releases and articles which were no doubt being spun to this direction or that," Warren said.

DP World, which has already received approval from the Committee for Foreign Investment in the United States, known as CIFIUS, has tried to douse some of the U.S. outcry by volunteering to submit to a second 45-day investigation of the deal's potential security risks.

Paul Downes, Eller's lawyer, argued that it was irrelevant to Eller's case whether the U.S. worries about DP World's takeover were justified.

"The concern was that the United Arab Emirates was a player, was involved, was associated with terrorist funding," Downes told the court. "It doesn't matter whether this is right or wrong, that is the mindset of the individuals that are concerned about this takeover."

Martin Moore, a lawyer for P&O, had told the High Court during a three-day hearing that Eller's case against the deal was "woefully thin."

President Bush has supported the deal and lawmakers initially opposed have appeared to soften slightly, tempering calls for an immediate vote to block the takeover. Many said that the new probe reassured them and negated the need for legislation for now.

Warren noted that the company has agreed to the extra review.

"The ports involved will continue to operate and it will be an overriding concern of everyone, including Congress and the president, to ensure that is so," he said.

A U.S. federal judge has also ruled against a request by New Jersey to order an investigation into the takeover.