End of an era at P&O – so what next?

Most striking is the fact that P&O looks set to wave goodbye to its long held presence in global shipping as a result of A P Moller’s ¢2.3bn formal offer to acquire P&O Nedlloyd based on an offer of ?57 per share. This will deliver into the P&O coffers ?579 million for the sale of its remaining 25% shareholding in P&O Nedlloyd, the latest in a series of asset sales which will undoubtedly be followed by the ferry business when it is in a condition to be sold.

P&O, when this happens, will be out of shipping and will, compared to A P Moller, already owner of the Maersk Sealand and Safmarine container lines, be a relative minnow in company terms.

Indeed, the contrast is interesting: while A P Moller has grown rapidly; P&O has shrunk almost commensurately!

The new P&O entity will no longer be under the stewardship of Lord Sterling who retired last month with a fanfare of industry plaudits and some rather telling remarks regarding the City, its preoccupation with Risk and a bean counter-like mentality that serves to dampen entrepreneurial fire.

The new Chairman, Sir John Parker, will preside over a vastly different “group” with unique challenges all of its own including, eventually, funding its activities in the ports sector without the advantage of asset sales elsewhere.

And who knows what Lord Sterling really thinks about the announcement, in the dying days of his rein, that Alistair Baillie, chief operating officer of P&O Ports for the past three years, will be made redundant on 30 June? Baillie’s departure, said an internal memo’, had been decided on as a result of the “changed shape of the overall group” and the fact that Robert Woods, group chief executive, is in a position to assume direct control of the port activities that are now so important to the company.

The industry bush telegraph suggests, however, this is a sanitised version of events and that Baillie’s departure is the outcome of a boardroom struggle which will see Nick Luff, chief financial officer, rather than Baillie, move into the position as the likely replacement for Woods when he retires, which could be as early as next year.

Baillie, however, is not departing alone, other key players are “leaving” as well and it will be very interesting indeed to see, following the crew change, how true a course P&O steers, and particularly with the mammoth London Gateway container terminal project where Baillie and his team have been at the helm since its inception.

It is the end of an era but is it a move from sail to steam?