Forth Ports holds off Northstream again

This proposal came to £14 (US$21) per share in cash, excluding a final dividend of 19.1p per share, a little up from the last proposal of £13.4 per share which was tabled on 3 February.

However, analyst Mark McVicker from Nomura puts the value 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.

Northstream already holds a large share of the UK business between its members: 23.5% of this share is held by Arcus Infrastructure Partners, a management buy-out of part of B&B’s European infrastructure business but Peel, who has a 3.5% stake so far, has a presence on the west of the UK, facing the US market.

The fact that six out of seven of Forth Port’s are on the east coast of Scotland, clustered around Dundee, Grangemouth and Leith in Edinburgh, all with access to Europe makes the acquisition good strategic sense for Peel, since the only real overlap are those facilities close to London: Forth’s Tilbury and Peel’s Medway ports.

The last partner is RREEF, the infrastructure arm of Deutsche Bank Asset Management, which holds a further 0.5% of Forth Ports.

In rejecting the consortium’s overtures last time, Forth Ports pointed out that it’s facilities “generate an income stream with a high level of predictability and have strong organic growth prospects”.

It went on to say that “Forth Ports has a number of other valuable assets, including a 33% shareholding in Tilbury Container Services, a substantial property portfolio and a number of renewable energy projects,” adding that it believes that the portfolio has the potential to appreciate greatly in value when property markets recover. Further, Forth thinks that its renewable energy projects “will generate significant value in future years”.