Dubai Ports World, the Arabian infrastructure giant which bought P&O in January, is considering floating part of the company on the London or Dubai stock markets later this year, in an attempt to raise £1bn of new capital for the business.
The floated company, which could be worth as much as £6bn, would comprise all of the P&O ports - including Tilston in Essex and Antwerp in Belgium - as well as Dubai's largest port, Jebel Ali.
The move would come just months after DP World took P&O private, paying £3.9bn for the company in January. Sources close to the group said yesterday that it had promised its bondholders that it would float part of the business within two years of the P&O deal, and that they would be given the chance to participate in the offering.
The group intends to use the new funds to expand the business, as well as to pay down some of its debt.
Deutsche Bank, which advised DP World on its acquisition of P&O, and Merrill Lynch have been appointed to advise the group on its options.
Last week, DP World's chairman, Sultan Ahmed bin Sulayem, told reporters that the group intends to spend up to $3bn (£1.6bn) on expansion over the next three to four years, as it seeks to boost its container traffic at its existing ports by 40 per cent.
The money is to be invested in facilities such as new cranes and new berths. "We will spend between $2bn and $3bn to expand existing ports," he said. "Many of these are greenfield developments. There are many ports with potential for growth."
He added that the company intends to develop ports in Callao, Peru, as well as Ho Chi Minh City, Vietnam's second city.
DP World won P&O after a fierce bidding battle against an investment arm of the Singaporean government. However, it was forced to sell P&O's five US ports weeks later after opposition to the assets being Arab-owned. Sultan bin Sulayem said last week that its adviser Deutsche Bank was currently evaluating bids for the five ports, but declined to say which firms had bid or what the likely value of the transaction would be. The battle for P&O came to a head just weeks after another major UK ports operator, PD Ports, was snapped up by the Australian investment bank Babcock & Brown for £260m. Meanwhile, a Goldman Sachs-led consortium is currently in the process of buying AB Ports for £2.8bn.
Last week, the Commons Transport Select Committee said it would open an inquiry into the UK ports sector, following all three of the UK's largest operators falling into foreign hands.
Sultan bin Sulayem said last week that his company would consider further acquisitions, but he said it was not actively pursuing any deals at the moment.
If the company pushes ahead with a float, it is believed that Sultan bin Sulayem would remain chairman, while Mohammed Sharaf would keep his position as chief executive.
P&O's former chairman Sir John Parker, who is currently helping DP World sell the five US ports, is believed to be being lined up for the position of vice-chairman on the board of the floated business.
The float would be another significant step in Arab business expansion, as Middle Eastern governments encourage diversification outside of the oil industry. Recently, several major global companies have been targeted by Middle Eastern firms, including the likes of British Airways which was linked to an offer from Emirates. The leisure company Tussauds Group was recently bought by Dubai International Capital, an Arabian private equity outfit.Reuse content