3i consortium poised to top Goldman's £2.4bn bid for AB Ports

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The Independent Online

A consortium led by the private equity group 3i and the Australian investment bank Macquarie revealed last night that it is mulling a counterbid for Associated British Ports, the country's biggest port operator.

Any offer, likely to be pitched at about £2.5bn, would top the £2.4bn takeover agreed between ABP and a consortium led by Goldman Sachs yesterday morning.

No new bid is assured, but representatives of 3i and Macquarie were expected to contact Bo Lerenius, ABP's chief executive, last night to discuss the possibility.

Mr Lerenius said yesterday: "If someone were to offer more, we would have to look at it. You are working for your shareholders."

The prospect of yet another bid battle will dismay Goldman, hard on the heels of the loss earlier this month of BAA, Britain's biggest airports operator, to the Spanish construction group Ferrovial.

The investment bank Dresdner Kleinwort Wasserstein was trying to buy 100 million ABP shares for 820p each yesterday morning as ABP said it would recommend the 810p-a-share offer from Admiral Acquisitions, the Goldman-led consortium.

DKW, buying on behalf of 3i and Macquarie, picked up only a fraction of the shares it wanted after investors quickly woke up to the possibility of a counterbid.

ABP shares surged 49.5p to 826.5p, valuing the company at nearly £2.5bn. Although DKW failed to secure the number of ABP shares it wanted, the highest price paid provides a floor for any counterbid. That, it was said, was as much as 830p.

Macquarie, which tried to buy the London Stock Exchange, and 3i have track records of buying infrastructure assets such as ABP. 3i lost out in the battle to buy another British ports group, PD Ports, at the end of last year.

Joining 3i and Macquarie (and two of the investment bank's infrastructure funds) in the consortium are Canada Pension Plan Investment and Industry Funds Management.

The spectacular growth in the Chinese and Indian economies has whipped up interest in infrastructure and cargo handling assets. P&O was controversially swallowed by Dubai Ports World for $6.8bn (£3.7bn) earlier this year, while Mersey Docks and PD Ports have also changed ownership over the past year.

Mr Lerenius stressed yesterday that only one offer was on the table and it was a good one.

"I would suggest that 810p, however you measure it, was a very strong price and our shareholders agree with that," he said.

The agreed takeover price represents a 49.3 per cent premium to the average price of ABP shares over the 12 months prior to the initial announcement of a possible offer in March. It is also much more generous than the 730p per share first offered by the consortium - comprising Goldman, the investment arm of the Singaporean government, a Canadian pension fund and Prudential - and rejected by ABP.

ABP would be liable to pay a break fee of £24.4m should the Admiral offer lapse or the recommendation be withdrawn.

That would be cold comfort to Goldman, which has failed to land a string of acquisition targets in recent months. The independent broadcaster ITV, London & Continental Railways and the pubs group Mitchells & Butlers have all wriggled off the hook.

Goldman's aggressive tactics provoked a rebuke from Hank Paulson, its departing chairman and chief executive, who warned its private equity bankers in London not to pursue unsolicited bids.

Any buyer of ABP would take control of 21 ports, including Southampton, Plymouth, Immingham, Grimsby and Port Talbot. Its estate spans 13,000 acres.

The company, which started life as the British Transport Docks Board in 1962, handles a quarter of the UK seaborne trade.

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