A British appeals court on Monday declined to hear a Miami firm’s objection to the takeover of British shipping company P&O by Dubai’s state-owned DP World, giving the green light to a deal that has caused an uproar in the U.S. over port security.
Miami-based Eller & Co had argued that U.S. concerns about a United Arab Emirates company owning significant operations at six major U.S. seaports could harm its business and had tried to have the deal barred on technical grounds.
Eller said they were very disappointed at the Court of Appeal’s decision.
“We are not alone in opposing this deal — many elected politicians in the U.S. and indeed the American public, share many of our concerns about the takeover,” a statement from Eller said.
Eller said while the legal process in the United Kingdom has been exhausted, it will continue to pursue legal action in the U.S. courts in Florida.
“We will continue to fight to protect our business and the livelihood of thousands of our staff and subcontractors.”
Deal approved last week
The $6.8 billion acquisition of the Peninsular and Oriental Steam Navigation Co. was given the required approval by the High Court last week. But High Court Justice Nicholas Warren placed a hold on his ruling to allow Eller to take the case to the higher court.
The rejection of the appeal means that P&O can now list the deal at Companies House, the final regulatory stage of the takeover.
P&O runs shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia — a fact that has caused unease among some lawmakers and businesses in the United States who have cited security concerns about an Arab company taking over the ports.
DP World has attempted to defuse some of the tension by submitting to a second 45-day investigation by the U.S. government, despite already receiving regulatory approval for the deal.
Chief Executive Mohammed Sharaf said Sunday he expected the deal to be completed.
“All the authorities are comfortable with the security measures that we take,” he said. “As far as we are concerned, the deal is going to go through, and the British government has approved it.”
“There are big consequences for the British market if it doesn’t go through because investors are waiting for the money,” he said on CNN’s “Late Edition.”
Lawyers for DP World warned last week that a delay beyond Friday meant that the company will not be able to access the money it needs to pay shareholders on time. The deal was previously scheduled to be completed last Thursday.
Consistent support from Bush
President Bush has supported the takeover deal and lawmakers initially opposed seem to have softened slightly, tempering calls for an immediate vote to block the takeover. Many said the new probe reassured them and negated the need for legislation for now.
A U.S. federal judge has also ruled against a request by New Jersey to order an investigation into the takeover.
Warren said in his ruling Thursday that U.S. concerns about port security and threats of port authorities withdrawing business were partly fueled by Eller and that he did not find them credible.
He also dismissed Eller’s claim that P&O allowed a series of procedural failings during the bid process, including the misdirection of letters to shareholders in Australia that left them uninformed about crucial meetings.