Mersey Docks and Harbour Company has received a takeover bid from a private equity firm.
The news caused shares in the Port of Liverpool owner to rise almost 10%, or 82p, to close at 933.5p.
In a statement issued to the stockmarket late yesterday afternoon, MDHC said it had received a preliminary bid from a private equity investor. However, the statement did not say whether the private equity group has linked up with existing management to make the bid or whether it intends to bring in a new management team. Nor did it name the private equity group.
One possibility is that existing management, led by chief executive Peter Jones, has been spooked into making a bid in response to Manchester-based Peel Holdings buying a substantial stake in the ports group. Last week, Peel, which owns and operates Liverpool John Lennon Airport, acquired a 9.25% stake in MDHC. Peel already owns Clydeport, near Glasgow, and Manchester Ship Canal and its associated docks.
At its current share price, MDHC is worth £716m.
As well as Liverpool and Birkenhead, the group operates ports at Medway in Kent and Heysham in Lancashire. It has terminals at Dublin, Belfast and Cardiff and manages facilities in Argentina, Kenya and Mozambique. It also has substantial property interests, including 2,000 acres in Liverpool’s docklands. MDHC has been developing Princes Dock with offices, hotels and apartments for the past seven years and has aspirations for a £200m development at Central Docks.
James Dow, a corporate finance specialist at Warrington-based Dow Schofield Watts, said yesterday: “MDHC assets are extremely attractive to private equity houses. A lot of debt can be raised on the back of them.”
Mr Dow pointed to the recent sale by Nikko Principal Investments, a private equity group, of its investment in Powell Duffryn, another port operator, as an example of what could happen.
MDHC has been a stock market quoted business since 1972, when an Act of Parliament changed its status from a trust run by shipping companies and trading as Mersey Docks and Harbour Board. It currently employs 1,700 staff around the group, with approximately half of that number based in Liverpool.
The statement yesterday said the bid was at a very early stage and that it was possible no firm offer would be made.
MDHC shares are in favour on the stockmarket and have outperformed the UK transport sector by 16% so far this year. It is the second largest ports group in Britain after AB Ports. At its half year results last month, the group reported a 5% rise in pre-tax profits to £28.7m.
Source: www.icliverpool.icnetwork.co.uk