Gulf-state backed Dubai Ports World was close to agreeing an offer to buy British ports and ferries company P&O for more than 3 billion pounds, a source familiar with the situation said on Saturday. The source added a deal could be announced early next week.

While an exact price for P&O remained unclear, newspapers on Saturday said Dubai Ports World was offering anywhere between 420 pence and 440p per P&O share. The Financial Times said Dubai Ports World was understood to have offered around 430p for P&O, whose shares closed at 437-1/2p on Friday. The Daily Telegraph said the two sides had agreed the deal in principle on Friday and the offer, pegged at about 440p, was expected to be unveiled early next week.

The source familiar with the situation said the offer was likely to be above the 420p a share cited by Saturday’s Daily Mail newspaper. Sources had told Reuters on Friday Dubai Ports World would not bid as much as 460p a share, as reported in one newspaper.

P&O and Dubai Ports World declined to comment. A source close to the negotiations told Reuters in Dubai that an announcement was expected soon.

The Financial Times said that Dubai Ports World still needed to agree the size of the liability in P&O’s pension fund before its offer could be recommended by the P&O board. P&O said on October 30 it had been approached by a potential bidder. Sources confirmed Gulf-state backed Dubai Ports World was behind the bid.

Denmark’s Moeller-Maersk, Singapore government investment agency Temasek Holdings and Hong Kong’s Huthcison Whampoa have also been named by analysts and banking sources as potential counter bidders.

P&O shares jumped more than 30 percent last month on expectations the Dubai approach could prompt a bidding war which analysts said could value the group between 3.0 billion pounds to 3.7 billion pounds, analysts said.

P&O, the world’s fourth-largest ports group, has long been considered a takeover target. Its stock hit a four-year high in May on speculation Temasek was building a stake in the group.

Source: Reuters

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