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The fall of P&O into foreign hands is bound to cause regret in some quarters, says The Daily Telegraph.
But it would be churlish for a company that grew rich on the back of Victorian-era globalisation to complain about the new world order. The $3.3bn bid by DP World, the Dubai-based ports operator, values P&O shares at a generous 443p, a 46% premium to the pre-bid price – and the board has advised shareholders to accept it. Any potential counter bidder is likely to be deterred by terms that oblige P&O to pay DP World £34m if the deal falls apart, says the FT. What’s more, the trustees of the pension scheme decided to ask for a cheque for £200m to cover the pension deficit before they would agree to the sale, says Patience Wheatcroft in The Times. That’s enough to put off potential rivals, but small change to the Dubai royal family who are backing the deal.
P&O is the world’s number-four container port operator, with 29 ports in eighteen countries. Until a year ago, DP had little business outside its home base, but the takeover will take it from sixth to third-biggest operator in the world. DP intends to keep the London headquarters, current management, employees and the 170-year-old brand. It is also committed to a planned giant new £1bn container port on the Thames gateway at Thurrock, Essex. The only mystery, says Lex in the FT, is why DPW wants to keep the troubled ferries business and property portfolio, which the management had been in the process of selling.
P&O’s fate is a cautionary tale for British business, says Jeremy Warner in The Independent. The sale follows a succession of disposals forced on the company by its City shareholders: P&O Ned Lloyd, the container shipping operation, was sold to Danish rival Moeller-Maersk, and P&O Cruises was taken over by Carnival. P&O might live on as a trade name, but the promise it once held of becoming a global powerhouse has been squandered by short-sighted City types with their short-termist mantra of “focus, consolidate and sell”.
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Harry Stourton
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