The Mersey Docks and Harbour Company confirmed this morning it had received a £781m takeover approach from rival Peel Ports.
Mersey, which operates the port of Liverpool, said that Peel, part of Peel Holdings, which owns Liverpool’s John Lennon airport and the Manchester Ship Canal, could offer £10 in cash for each share.
The offer is well above the 925p offer Mersey Docks’ board said was on the table from a private equity house on 17 January, and raises the prospect of a fierce bidding battle for the UK’s second largest ports operator.
The battle for the group, which operates ports at Liverpool, Heysham and the Medway towns of Sheerness and Chatham, intensified last week when Peel doubled its stake in the firm to just over 25%.
Mersey Docks first revealed in November that it had received an approach from a private equity group understood to be CVC, which analysts said could be worth more than £720m.
The company said today that Peel’s £10 a share proposal was subject to due diligence, which was about to start.
It said there was no certainty that an offer would be made, but added that under the terms of its recent stake purchase, takeover rules meant the offer must be no less than £10 a share.
In addition to its four ports, Mersey has a shipping division trading as BG Freight Line as well as the Roadferry logistics and transport business.
Analysts have talked up the quality of the ports division, the potential to redevelop surplus land and an ongoing programme to buy back its own stock.
Peel also operates Scotland’s Clydeport, which covers a 450 square mile area on the River Clyde, its estuary and lochs, and it owns the Trafford Centre in Manchester.
Other assets include the Glasgow Harbour development.
Shares in Mersey Docks stood at 976.5p before today’s announcement.
References: EGi News 02/02/05
