Forth Ports backs £760m takeover
Tilbury Docks owner Forth Ports has given its backing to a 1630p-a-share offer from Arcus European Infrastructure Fund, which already owns 22.8% of the company as well as continental Europe’s second biggest dry bulk port operator Euroports.
Arcus has pledged to keep Forth’s headquarters in Scotland and said it wants to “support and grow” the group’s core ports business.
David Richardson, chairman of Forth Ports, said: “The Arcus offer gives Forth Ports shareholders the opportunity to realise their investment for cash at a fair price.
“It is also pleasing that this successful Scottish company will continue to be run from Scotland.”
Details of the takeover, which was first revealed earlier this month, come as Forth also posted a 10% rise in annual underlying pre-tax profits to £36.6 million.
Edinburgh-based Forth Ports has eight port sites including Tilbury in London, Scotland’s largest container port at Grangemouth, and Leith in Edinburgh.
The bid from Arcus - an investment firm formed by the management buyout of part of Babcock & Brown’s European infrastructure business in July 2009 - is its second within a year after a 1400p a share proposal from a consortium headed by the group - worth £640 million - was rejected in April.
It latest offer includes a commitment to pay a 20p a share dividend, with the total value representing an 8% premium to the closing price of Forth’s shares before it confirmed the approach, and a 14% premium to the value of shares before takeover rumours sent the stock higher.
The Arcus deal, which is subject to shareholder approval, values Forth Ports at £750 million when the final dividend payment is stripped out.
Forth Ports has more than 11,000 employees across its business, which also includes a recycling business based out of Kent and Tilbury.
It said in today’s full-year results that the ports arm performed well in 2010, adding that trading in the first two months of 2011 had been “encouraging”.
Revenues across the group rose 5% in the year to £181.9 million.
It started life in 1967 as a public trust port, originally operating six ports within the Firth of Forth.
The group was privatised in 1992 and expanded in the following years by snapping up Tilbury and the Port of Dundee on the River Tay in 1995.