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Forth Ports knocks back £640m offer

A CONSORTIUM of shareholders bidding for Forth Ports could walk away from a takeover after the Edinburgh-based docks operator shunned a sweetened bid worth £640m.

Shares in Forth Ports surged eight per cent to £13.42 after the board unanimously said the £14 per share offer from Northstream fell “far short” of the company’s value. It is thought other investors are demanding £15 per share, while Nomura recommended as much as £18.

Northstream, which comprises John Whittaker’s Peel Group, infrastructure fund Arcus and Deutsche Bank’s RREEF, already owns 27.4 per cent of Forth Ports. The consortium believes its offer is in line with similar deals in the sector. It was last night said to be “considering its options”.

Disagreements centre on how to value Forth Ports’ property portfolio, which includes assets such as London’s Tilbury docks. While Northstream thinks the planning costs of realising Forth Ports’ land holdings are difficult to assess, the target company insists its plans to expand into renewable energy with wind farms and biomass power stations will generate long-term value.

As an alternative to its previous proposal, the consortium offered a paper instrument to give investors ongoing exposure to Forth Ports’ property assets. Sources close to Forth Ports rubbished the idea, claiming investors would not want to hold an unlisted and illiquid instrument.

Northstream insisted its bid was a “highly compelling proposition”.

FAST FACTS | FORTH PORTS

● Forth Ports revealed on 8 March it had been approached twice by Northstream at up to £13.40 per share. Its stock jumped 26 per cent.

● Northstream’s latest offer is a premium of 34.2 per cent to February’s share price.