Goldman outbids Macquarie Bank in AB Ports deal

LONDON: A Goldman Sachs-led consortium has outbid Australia’s Macquarie Bank for Associated British Ports after raising its cash offer in an auction to nearly £2.8bn ($5.2bn). But Macquarie is not out of the race and is considering its position despite losing one member of its bidding consortium, sources familiar with the situation said on Friday.

Admiral Acquisitions, the Goldman Sachs consortium, said AB Ports had recommended a revised offer of 910 pence per share, 8.3% higher than its previous proposal of 840 pence. AB Ports shares jumped 4.7% to a fresh record high of 922 pence at 0713 GMT, signalling that investors are still hopeful of a higher bid.

The revised offer from the Goldman group followed a late-night bidding contest after Macquarie approached AB Ports with an offer. The ports group asked both sides to put their best bids on the table, sources said. The Macquarie group has told AB Ports shareholders to take no action over the increased Goldman bid, saying it is “considering its position”.

One of the sources said UK private equity firm 3i Group had pulled out of the Macquarie bidding consortium. A Macquarie spokesman declined to comment further on Friday.

Goldman Sachs is under pressure to complete a deal after a string of failed bids, including for airports group BAA, broadcaster ITV and pub company Mitchells & Butlers. Port groups have become attractive targets due to their stable income streams and property assets, and with shipping markets buoyant on the back of a growth in world trade. In March, Dubai Ports World completed a $6.8bn takeover of P&O after a bidding war with Singapore’s PSA International.

Goldman said that AB Ports directors intended to recommend the latest Admiral offer which they considered “fair and reasonable”. Goldman agreed a 810 pence offer on June 14 for the group, which operates 21 UK ports, handling about a quarter of the country’s sea trade, before raising the stakes to 840p in an attempt to test the resolve of the Macquarie consortium.

Macquarie followed up with an informal bid approach, proposing to match the 840p offer. The Admiral group is 33% owned by Canada’s Borealis Infrastructure, the investment vehicle of Ontario pension fund OMERS. It’s 33% owned by GIC Special Investments, an arm of the Government of Singapore Investment Corporation; 23% by Goldman Sachs; and about 10% by the Prudential Group’s Infracapital Partners.