No more bids for Forth Ports – for now

Although the Northstream consortium cited economic uncertainties, the main difficulty has been, it seems, the value put on the landside assets – an issue which Forth Ports has brought up time and again when rejecting the offers from Northstream.

“In light of the current economic uncertainty and the resultant difficulty of valuing Forth Ports’ property assets from public information, the consortium is unable to justify increasing its proposed offer further,” Northstream said in a recent statement. “As a result, and after careful consideration, the Consortium has decided not to proceed with an offer for Forth Ports.”

The last proposal in April came to £14 (US$20.30) per share in cash, excluding a final dividend of 19.1p per share.

However, analyst Mark McVicker from Nomura put the value somewhat higher at £14.50 per share, taking into consideration “the scale and valuation of the extensive property development assets and the potential from renewable energy”, while also looking at the company’s strategy of maximising value per acre across the extensive dock estates in Scotland and Tilbury from current and future income streams. It is interesting that in the light of this, the board members still vetoed a £15.00 share proposal.

A rise that floated Forth Ports’ shares broke with the latest announcement, bringing Forth’s shares back to around the same levels as before the proposals began. Forth explains that this was to be expected, and since the speculative investors have now exited, Forth will get back to building value for its long term investors.

The consortium has broken up after the latest rebuff, although the individual members said they reserved the right to buy more shares in Forth either on their own, or in partnership with another consortium, provided it met takeover panel rules.