Powell Duffryn falls to £507m offer from private equity firm

The private equity market claimed another Old Economy scalp yesterday as Powell Duffryn, the ports and engineering group, yielded to a £507m offer from Prestige Acquisitions, the buyout arm of Japan's Nikko Securities. The purchase closes the seven-month auction for Powell Duffryn that began in April when it sought buyers for its engineering assets.

The private equity market claimed another Old Economy scalp yesterday as Powell Duffryn, the ports and engineering group, yielded to a £507m offer from Prestige Acquisitions, the buyout arm of Japan's Nikko Securities. The purchase closes the seven-month auction for Powell Duffryn that began in April when it sought buyers for its engineering assets.

Nikko, which is offering 650p per share, has received acceptances from shareholders owning 29.4 per cent of the group, in effect, sealing its fate. The stock, which touched an eight-year low of 341p in April, closed up 33.5p at 638.5p. The offer is a 40.1 per cent premium to the closing share price before Powell Duffryn said in July that it had received approaches.

A Nikko spokesman said Powell Duffryn's attraction was its Tees and Hartlepool Port Authority. "Ports are attractive to anyone who can restructure the financial side of the business and improve cost of capital."

He added that in a move "characterising Japanese generosity", holders of share options in the group's employee share-save scheme would be treated as if they had made an extra six month's contributions. Powell Duffryn's existing management team is to oversee Nikko's planned disposal of the engineering business. Nikko has no plans for any major job cuts.

Sir Noel Davies, Powell Duffryn's chairman, said: "The group has been re-shaped over the last five years. This is a most attractive offer."

"The stock market has lost appetite for this kind of Old Economy two legged horse," said one banker involved in yesterday's deal.

In July, rival Forth Ports rejected an informal offer from Duke Street Capital, another buyout house.