British Ports prepares US bid

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The Independent Online
ASSOCIATED British Ports, the UK's largest ports operator, is planning its first foray overseas. The group announced yesterday that it was in takeover talks with American Port Services, the US port group and car importer, which promises to open a new chapter in its history.

ABP said it may bid about pounds 98m or 190p a share for American Port Services. Tim Chadwick, the group's chairman, stands to become a multi-millionaire from the deal.

Andrew Smith, ABP's managing director, said yesterday: "American Port Services is slap bang in the middle of our declared strategy. We have made an offer of 190p in cash, which has not quite yet been formally recommended to shareholders."

ABP's shares slipped 6p to 369p, while American Port's stock rose 14p to 179p in anticipation of a bid.

ABP has been criticised by some institutions for missing chances to bid for ports coming up for privatisation around the world. This deal would give it a foothold in the US market and give it a chance to tender for ports being put up for sale by American local authorities.

However City analysts treated news of the planned acquisition with caution. One observer pointed out that the acquisition marked a U-turn, taking ABP into the sort of port-related activities that it had previously tried to get out of.

American Port Services owns five ports on the eastern and western seaboards of the US.

The group's shares fell sharply in December after a profit warning. The company said then that the negative impact of the Far East economic crisis on imports of US cars to Asia would hit profits.

American Port could be the first in a number of acquisitions for ABP as Andrew Smith tries to transform its financial fortunes. By 2000 his aim is to have 25 per cent of the group's earnings coming from acquisitions.

ABP also intends to increase the number of services that the group provides in the ports its currently manages.

Mr Smith said he wants the company to become more "operational", by running, for instance, services such as grain and container terminals whereas currently it merely collects dues from incoming ships, and provide a similar range of services as its prospective acquisition already does.

American Port Services provides many of its customers with value-added low technology services. At its car terminals, for example, it will add roof-racks, or sun roofs, and also wash vehicles so they can go straight into showrooms.

Mr Smith said that he expects the offer to be recommended shortly, adding that, at the current offer price, the acquisition will enhance earnings in 1999.