P&O board keeps faith with DP World offer

P&O board keeps faith with DP World offer

   The board of London-based ports and ferries group Peninsular and Oriental Steam Navigation Co. has reconfirmed its support for the '3.3 billion ($5.7 billion) takeover offer from Dubai state-owned port operator DP World.

   In recent weeks, Temasek Holdings, the Singapore government-controlled parent company of global port operator PSA International, has increased its holding in P&O from 2 percent to 4.1 percent. The prospect of a rival bid from Temasek has lifted P&O’s share price and also caused shareholders to withdraw initial commitments to sell to DP World.

   “The P&O board of directors has had no contact from PSA or Temasek and no proposal has been received. Therefore, there can be no certainty that any proposal will be forthcoming. As a result, the P&O board of directors sees no reason to alter its recommendation of the (DP World) offer,” P&O said in a statement.

   For DP World’s offer to be successful under the scheme of arrangement, it must be accepted by 75 percent of P&O’s shareholders rather than the normal 90 percent offer structure. P&O has agreed to pay DP World a '34 million ($59 million) inducement fee should any rival party make a successful bid. At present, DP World said it holds letters of intent for it to acquire approximately 15.8 percent of P&O’s issued deferred stock.

   DP World’s offer is equal to '4.43 ($7.82) per share. At 12.30 a.m. today P&O’s share price on the London stock exchange was '4.68 ($8.26).