Target: AB Ports
Buyer: Goldman Sachs, OMERS, GIC Special Investments
Reported bid: $4 billion (£2.3 billion)
Target’s Financial Advisor: Deutsche Bank
Products ranging from spinach to olive oil are shipped to America through sea ports. The recent controversy in the United States over the potential partial control of six U.S. ports by a Dubai-based company showed not only the politically poisonous atmosphere surrounding foreign ownership of major transportation assets, it proved also that private equity groups are not afraid to step into the mix. But it will apparently take more than Popeye-sized strength to woo foreign ports.
Goldman Sachs was joined by the
AB Ports is a London-based publicly-traded company that operates 23 ports in the U.K. It is the U.K.’s largest ports group and handles approximately 25% of that country’s merchant sea business. It also has ancillary real estate businesses as well as a U.S.-based component. The company forecast in February that its business in the U.K. would expand with the opening of two new ports in the latter half of the year.
Goldman Sachs announced through its London office that it had participated in the bid and did not return further calls for comment. OMERS declined to comment on the potential transaction, but confirmed it knew of the Goldman Sachs statement. Goldman Sachs approached AB Ports advisor
AB Ports’s stock price rose the week before on the news that the company may be entertaining a buyout bid.
OMERS participated in the consortium through
The deal would have taken on extra significance in light of the recent political firestorm that erupted in the U.S. over
Buyout insiders had considered the AB Ports deal a potential bellwether that could have had the effect of sending more buyout firms on the hunt for port deals. One potential port business investor told Buyouts:
“Ports are like toll roads or other transportation facilities in that historically there had been relatively few that became available for private equity investment… thus precedent transactions for these purposes had not been there. We are now starting to see ports as more of a mainstream type of investment, but it is still unproven whether they will be ‘home runs’ in terms of private equity returns, or stable, predictable and diversifying.” — M.S./D.P.