P&O accepts $5.7 billion takeover offer from DP World
The board of London-based ports and ferries group Peninsular and Oriental Steam Navigation Co., has accepted a '3.3 billion ($5.7 billion) takeover offer from DP World, which would make the Dubai-based port operator the world’s third-largest terminal operator.
The offer is equal to '4.43 ($7.65) per share. At midday today P&O’s share price on the London stock exchange was '4.37 ($7.54).
P&O operates 29 container terminals in 18 countries. DP World, which in February acquired CSX World Terminals for $1.1 billion, currently manages ports in Asia, Europe, Australia and South America, with a capacity in excess of 24 million TEUs.
“DP World’s acquisition of P&O will create a top three global ports operator with the scale and network to service an increasingly global and consolidating customer base,” said Sultan Ahmed Bin Sulayem, DP World chairman. “The unparalleled strategic fit of the two companies’ complementary global ports portfolios and the strong development pipeline, including London Gateway, is particularly compelling.”
The two parties said Robert Woods, P&O’s chief executive officer, would continue to run the company with its headquarters remaining in London.
“DP World’s offer recognizes that P&O is a unique brand with an exceptional footprint of international port assets. The board believes this all-cash offer is in the best interests of the deferred stockholders who will receive a substantial return on their investments,” said John Parker, chairman of P&O. “P&O employees will also benefit. DP World have made clear they regard the management and employees as key to the ongoing success of the combined entity, and that they recognize the importance of P&O’s ferries and properties divisions, as well as ports,” Parker said.
P&O admitted in October that it had received a takeover approach, with much speculation on DP World, A.P. Moller-Maersk and Hutchison Whampoa. P&O has agreed to pay DP World a '34 million ($59 million) inducement fee should a rival party make a successful bid.