AB Ports rebuffs takeover offer

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Associated British Ports rejected a 730p a share takeover offer last night from an investment consortium that includes the US bank Goldman Sachs.

It emerged this week that the consortium, which also includes Canada's Borealis and GIC, the private-equity arm of the Singapore government, was poised to make a move.

Early speculation anticipated an offer of 740p a share, valuing AB Ports at £2.3bn. It seems that this included the AB Ports dividend of 10p, money that shareholders would have received in any case.

After a board meeting yesterday, AB Ports issued a statement to the stock market in which it described the bid as "wholly inadequate". Analysts seemed to agree this week, suggesting that investors may want up to £9 to be interested.

AB Ports shares dipped 14p to 717p yesterday, though analysts said this was mainly because the stock has just gone ex-dividend.

The company is widely expected to attract other offers, potentially sparking a bidding war for the UK's biggest ports group.

AB Ports operates 21 ports across the UK, offering bidders a steady, predictable stream of income.

The consortium was considering its options last night but is aware it will have to come back with a better offer to succeed.

Given the powerful group of investors involved, finding more cash will not be a problem. Borealis is the investment vehicle for the Ontario pension fund OMERS. GIC, which has assets of £60bn and was set up in 1981 to manage the foreign reserves of the Singapore government.

The news comes after the $6.8bn takeover of the UK ports operator P&O by Dubai Ports World this month, and represents the latest in a growing list of offshore predators snapping up UK port assets.

Port operators such as AB Ports have become attractive targets because of their stable income streams, large property portfolios and buoyant shipping markets on the back of growth in Chinese trade flows.

An Australian investment fund bought Britain's PD Ports for £337m in January. Forth Ports is now the only remaining UK ports group that has not faced a bid.