Newspaper article The Evening Standard (London, England)

Tide Turns against P&O on Sinking Bid Battle Hopes

Newspaper article The Evening Standard (London, England)

Tide Turns against P&O on Sinking Bid Battle Hopes

Article excerpt


P&O tumbled 261/2p to 4671/2p today as State-owned Singaporean investment company Temasek effectively ruled out a counterbid for the group despite raiding the shares on Friday and acquiring a 5% stake.

But it looks as if Temasek does want to increase its holding to 10% to deny Dubai Ports World outright control and give it a significant say in how the company is run.

Dealers say that if Temasek, which owns the Port of Singapore, had been serious about a counterbid, it would have launched one immediately rather than buy shares in the marketplace.

Some speculators reckon Li Kashing's Hutchison, which already owns the Port of Felixstowe and Harwich International Port, and Denmark's AP Moller-Maersk may yet counterbid, but P&O chairman Sir John Parker says he has not spoken to other possible buyers since being approached by DP World at the end of October.

Temasek is run by Ho Ching, wife of Prime Minister Lee Hsien Loong, and began building its stake in P&O just three days after the company agreed a [pounds sterling]3.3 billion (443p-a-share) bid from DP World, Dubai's State-owned ports operator. Before Dubai's approach, P&O shares were changing hands for 310p.

Broker Merrill Lynch has warned a premium price could ultimately be required to secure control of P&O.

News of a bid approach lifted Biofuels Corporation, which makes biodiesel fuels from rape seed, 9p to 110p. It comes just days after the company secured new debt facilities from Barclays and announced wider pre-tax losses of [pounds sterling]13.27 million. The shares were briefly suspended at 143p on 16 November but were finally requoted on Friday and are continuing to trade well below their March peak of 302p.

At these levels, Biofuels is valued at [pounds sterling]48 million. One company being tipped as a possible suitor is rival D1 Oils, which tumbled 171/2p to 255p but is still worth double its AIM-listed rival.

John Laing ran into profit-taking, falling 12p to 329p in the wake of Friday's bid approach that lifted the shares 17%. Broker Collins Stewart says the most likely suitor is deal-hungry Australian banking outfit Macquarie, which is currently putting together a bid for the London Stock Exchange. …

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