Fund returns with £745 valuation in move to buy ports company

The interest has come from the same European infrastructure fund involved in a failed takeover approach for Forth, worth £640m, last year.

Arcus, which already owns 22 per cent of Forth, has been allowed to undertake due diligence by its bid target, which has seven sites, including Tilbury, in London, Scotland’s largest container port, at Grangemouth, and Leith, in Edinburgh.

The latest proposal is at 1630p a share, valuing the company at around £745m, and higher than the 1400p – or £640m – rejected in April.

Other members of last year’s consortium included Peel Ports, whose interests range from the Manchester Ship Canal to the Mersey Docks.

Arcus – an investment firm formed by the management buy-out of part of Babcock & Brown’s European infrastructure business in July 2009 – has interests including Euroports, the second largest dry bulk port operator in continental Europe, and Luxembourg-based Alpha Trains, which leases train rolling stock.

Forth said it has held talks with Arcus about the indicative and conditional offer, which has been accompanied by a pledge to pay a dividend of 20p a share in respect of Forth’s trading in 2010.

The company said: “On the basis of this indicative proposal, the board has agreed that Arcus can undertake certain confirmatory due diligence.”

Forth achieved a 29 per cent increase in half-year profits, to £16m, in August after a rise in container volumes at its Tilbury site.

London’s major gateway port increased half-year container volumes by 10 per cent and looked set for a boost from the 2012 Olympics as the organising team starts using the site, including 500,000 sq ft of warehousing.

The firm reported mixed demand elsewhere, with container handling at Grangemouth down 10 per cent.

The ports business made slightly higher profits of £16.9m, while its recycling and property divisions made losses of £100,000 and £800,000 respectively.

The company’s ports also include Dundee, and Methil, Burntisland and Rosyth, on the Firth of Forth.