Takeover Battle Erupts for AB Ports

A takeover battle erupted for Associated British Ports Holdings PLC on Thursday as a consortium led by investment bank Goldman Sachs Group Inc. (GS) raised its offer and a rival group led by Australia's Macquarie Bank Ltd. made a bid at the same level.

Both consortiums announced offers valuing the ports company at nearly 2.6 billion pounds ($4.8 billion).

AB Ports, which owns 21 ports across Britain including Grimsby and Hull, as well as a 49 percent stake in the Southampton container port, had rejected Goldman Sachs' bid of 730 pence ($13.44) a share in March.

Goldman Sachs' Admiral consortium was the first to reveal it had raised its bid to 840 pence ($15.46) per share, just a day after it had reached agreement with AB Ports for a takeover at 810 pence ($14.90) per share.

The move was interpreted as an attempt to stave off a rival bid from a consortium including Australia's Macquarie Bank Ltd. and the British 3i Group PLC.

However, AB Ports later said it had also received a pre-conditional proposal from the Macquarie consortium indicating a cash price equivalent to the Goldman Sachs offer.

"The board is currently evaluating the Macquarie consortium's proposal in light of the revised cash offer from Admiral," it said.

AB Ports shares jumped 5.1 percent to 869 pence ($16.06) on the London Stock Exchange.

Speculation about a counterbid began Wednesday when Dresdner Kleinwort Wasserstein jumped into the market and began buying AB Ports shares.

Also in the rival consortium are the Canada Pension Plan Investment Board and Australia's Industry Funds Management.

Port operators have become attractive takeover targets of late due to their stable income streams, large property portfolios and buoyant shipping markets on the back of growth in Chinese trade flows.

Earlier this year, Dubai-based DP World won a bidding war to pay 3.9 billion pounds ($6.8 billion) for the Peninsular and Oriental Steam Navigation Co., the parent company of P&O Ports. AB Ports shares ownership at Southampton with P&O Ports, which holds 51 percent.

In addition, Mersey Docks & Harbour agreed to a 771 million pound ($1.42 billion) takeover by Peel Ports in June and Teesport operator PD Ports was swallowed up by Australian infrastructure group Babcock & Brown for 260 million pounds ($479 million).

The Goldman Sachs consortium also includes Borealis Infrastructure Management Inc., a part of Canada's Ontario Municipal Employees Retirement System; and Singapore government fund GIC Special Investments Ptd. Ltd.

Goldman Sachs led an unsuccessful takeover attempt earlier this year for airports operator BAA, another British infrastructure asset. A consortium led by Spanish construction company Grupo Ferrovial SA sealed the deal with a 10 billion pound ($18.4 billion) bid.

Goldman Sachs was also part of a private-equity consortium that dropped a bid for ITV PLC in March after the British TV broadcaster rejected its second approach.