Associated British Ports, the UK's biggest ports owner, yesterday rejected an offer from Nomura, the Japanese investment bank, that was thought to value the group at £1.1bn.
The company said: "The board of ABP confirms that it has received an informal approach from advisors to a third party. The approach was at a level which would significantly undervalue the company and its prospects."
The offer was received late last week but it is believed that no talks are continuing. ABP was forced to acknowledge the approach after weekend press reports. It is thought that the offer was pitched at around 320p a share, well above Friday's closing share price of 264p. No formal offer was made. Yesterday, ABP shares gained 49.5p to close at 313.5p.
A source said ABP showed no inclination to discuss the offer, despite indications that more money could be made available.
Nomura's principal finance team, led by Guy Hands, has never made a hostile bid. Sources said they had no intention of going hostile in their approach to ABP. "Nomura looks at some 150 deals a year. It doesn't have to do this one. It is not going to strong-arm them. It approached them on a friendly basis. They [ABP] said there was nothing to talk about and walked away. They were not willing to explore. It was not very helpful," he said.
Alastair Gunn, an analyst at Credit Lyonnais, said: "Institutions are not great lovers of this company, so 350p-375p should be enough to secure it, if no other bidder emerges. The big wild card is whether P&O [the transport group] will come in. They could use it as a cash cow to fund overseas expansion." He also said part of ABP's defence could be the announcement of another shares buyback programme, funded by selling some of the land holdings around its ports.
John Lawson, an analyst at WestLB, said a knock-out blow would need to come in at 400p a share. "ABP has some wonderful assets and a solid earnings flow. It would cost a fortune to build these ports." ABP owns 23 ports, including Southampton and Hull, and handles a quarter of Britain's seaborne trade.Reuse content