DP World raises the stakes in P&O bidding war

Dubai and Singapore continue to raise the stakes in their battle for control of Britain’s Peninsular & Oriental Steam Navigation Company (P&O). In the latest move, Dubai Ports World (DP World) slapped a massive US $6.9 billion cash deal on the table, eclipsing the previous offer made by their rivals PSA.

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By  Robeel Haq Published  February 1, 2006

DP World raises the stakes in P&O bidding war|~|p&o3.jpg|~||~|Dubai and Singapore continue to raise the stakes in their battle for control of Britain’s Peninsular & Oriental Steam Navigation Company (P&O). In the latest move, Dubai Ports World (DP World) slapped a massive US $6.9 billion cash deal on the table, eclipsing the previous offer made by their rivals PSA. However, PSA has not been blown out of the water yet. The success of the company is a key factor in the success of Singapore's economy. Therefore, analysts are predicting that PSA will announce a major counterbid instead of quietly exiting the race. The huge amount of money being offered has highlighted the importance of P&O on a global level. The company remains a sizable player in the shipping sector, operating 27 container terminals and logistics operations in over 100 ports around the world. These figures represent plenty of opportunity to both DP World and PSA. In fact, once the purchase is complete, its very unlikely P&O's assets will ever be available for sale again. There is booming demand from US and Europe for low cost Asian goods, which mainly travel by sea. To capitalise on this demand, DP World and PSA, together with other port operators such as Hong Kong's Hutchison Ports Group, are constantly competing for more container terminals. By purchasing P&O, PSA stands to become the world's biggest container port operator. On the other hand, DP World could become the world's second biggest container port operator. With such high stakes, the bidding war could continue for some time, depending on Singapore's willingness to raise the stakes further. However, Dubai seems determined to fight until the bitter end and succeed in its bid to become one of the world's biggest marine players. ||**||

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