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Goldman group may bid for British ports firm

A consortium including Goldman Sachs and investment groups from Canada and Singapore is considering a bid for Associated British Ports Plc, sending shares in Britain's biggest ports group to new highs.
/ Source: Reuters

A consortium including Goldman Sachs and investment groups from Canada and Singapore is considering a bid for Associated British Ports Plc, sending shares in Britain's biggest ports group to new highs.

Goldman Sachs said on Monday it was working with Borealis, the investment vehicle of Ontario pension fund OMERS, and GIC Special Investments, the private equity arm of the Government of Singapore Investment Corporation, but that there was no certainty an offer would be made.

Earlier on Monday, the City A.M. newspaper quoted an unidentified high-level source as saying the consortium was working on a 740-pence-a-share bid for Associated British Ports (AB Ports) worth about 2.3 billion pounds ($4.0 billion).

Britain's port groups have attracted a string of bids in recent months, with suitors attracted by rising world trade volumes as well as their property assets.

Dubai Ports World spent $6.8 billion winning a bid battle for Britain's P&O earlier this year, while Mersey Docks and PD Ports were taken over last year.

"The consortium's considerations are at a preliminary stage, and there can be no assurance that any offer will be made," Goldman Sachs said in a statement.

AB Ports declined to comment, while Goldman, Borealis and GIC could not immediately be reached for further comment.

"We believe that it the bid materialises, it may not be long before it becomes contested," analysts at Panmure Gordon wrote in a research note.

But they added AB Ports could be worth more to shareholders as a quoted company, following UK government proposals last week that could allow firms to extract more value from their property assets. AB Ports has a large property portfolio.

Shares in AB Ports, which handles about a quarter of Britain's seaborne traffic, rallied over 10 percent after the proposals were announced last Wednesday, though dealers said this was also in response to speculation of a possible bid.

Panmure Gordon said AB Ports' enterprise value is currently around 12.4 times its earnings before interest, tax, depreciation and amortisation (EBITDA), compared with the 13.3 times at which P&O was bought by Dubai Ports World.