Acquisition on horizon for Teesport owner
THE owner of Teesport was yesterday reported to be interested in mounting a takeover of Forth Ports after building up a significant stake in the business.
Australian investor Babcock & Brown is said to have built up a 10% holding in the UK’s last publicly-listed ports operator.
The fund is said to have struck a deal with investment bank Goldman Sachs to buy its 8% share in Forth, as well as a further 2% elsewhere in the market. The Forth Ports group owns and operates seven commercial ports in the UK – Tilbury on the Thames, Dundee in the Firth of Tay and five in the Firth of Forth – Leith, Grangemouth, Rosyth, Methil and Burntisland. It also operates out of Chatham in Kent under the Nordic banner.
Forth’s share price has risen 10% in the past three months amid rumours of a £1.1bn approach as investors are attracted by the group’s steady cashflows and growth prospects amid recent stock market turmoil.
Sydney-based Babcock & Brown is already the third biggest ports operator in Europe after its £260m acquisition of PD Ports in 2006.
Sources told a Sunday newspaper that the investment firm was likely to build up its stake in Forth to around 20% before deciding whether to bid for the entire company.
Forth painted a positive picture of current trading in its most recent update in December. It said it was on track to meet financial targets after “significant improvement” in trading at its sites in recent months.
As well as its ports business, Forth has a property arm and it is currently in discussions with City of Edinburgh Council over a planning application for the regeneration of Leith Docks.
Babcock & Brown and Goldman Sachs were unavailable for comment.
