Forth Ports shares soar after £612 million takeover approach

Published on Monday 8 March 2010 08:55

EDINBURGH-based Forth Ports saw shares surge almost 25 per cent today after revealing a £612 million takeover approach by a group of major shareholders.

Forth Ports - which is the UK's biggest listed ports operator - owns seven UK ports, including Leith.

The group, which has around 1,200 staff, also has ports in Dundee and on the Firth of Forth at Methil, Burntisland and Rosyth. It also owns the container port at Grangemouth and Tilbury in London.

Late on Friday it rejected an improved 1340p a share proposal from a consortium which currently owns 27.4 per cent of Forth's shares, following an initial approach in January.

Forth said the price "fell far short" of the value of the business. Markets were betting on a higher bid emerging today as shares soared beyond 1340p to value the company at 636 million.

The consortium is led by Arcus European Infrastructure Fund, an investment firm formed by the management buyout of part of Babcock & Brown's European infrastructure business in July last year. Arcus holds 23.5 per cent of Forth.

Other members are Peel Ports – a 3.5 per cent shareholder in Forth with interests including the Manchester Ship Canal and Mersey Docks – as well as RREEF, which is the infrastructure fund of Deutsche Bank.

Forth has said it will meet with the consortium after its annual results in two weeks' time.

The group's portfolio is attractive to would-be buyers because of its steady revenue stream and growth prospects.

Arcus – then Babcock & Brown – originally bought a 20 per cent stake more than two years ago when shares were trading around the 20 mark.

Forth gave a heavy hint that the consortium was attempting to snap up the company on the cheap as it stressed its portfolio of ports, property and renewable energy projects "has the potential to appreciate greatly in value when property markets recover".

Forth is working with its joint venture partner Scottish & Southern Energy on proposals for four biomass plants at its Scottish ports which could add "significant value" as well as make a major contribution to the country's renewable energy needs.