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U.S. Firms Bid for Dubai Ports World Assets
Between five and eight U.S. companies are vying for the U.S. port assets of Dubai Ports World in a second round of the sales process, the official overseeing the sale said in a letter to U.S. lawmakers. The letter, obtained by Reuters Friday, and signed by Nick Luff, said the sale of the U.S. assets would likely take "a little beyond" the six months Dubai Ports World had expected. The company, owned by Dubai of the United Arab Emirates, bought the assets at six U.S. ports earlier this year as part of its $6.8 billion purchase of Peninsular & Oriental Steam Navigation Co. of Britain. The deal was approved by the Bush administration, but created an uproar in Congress, where lawmakers said they had security concerns about an Arab state-owned company operating U.S. port terminals. Dubai Ports World responded in March by saying it would sell the U.S. assets it had acquired. A Dubai Ports World representative declined to comment on the sale process, but confirmed the authenticity of the letter from Luff, formerly the chief financial officer of P & O. There was no immediate reaction on Capitol Hill.
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Some 100 companies initially expressed an interest in buying the port operations in New York, New Jersey, Philadelphia, Miami, Baltimore and New Orleans, sources close to the sales process said in June. Luff's letter, dated Aug. 31, said the initial bidders included infrastructure funds, private equity houses and "strategic" bidders. He did not identify the companies that had been invited to participate in a second round, nor did he reveal the bid amounts. But he said they were all U.S. companies, with their parent companies also being U.S. companies. "In some cases, the bidder is considering or planning to work with a minority partner, some of whom have ultimate parent companies that are from the European Union, Japan or Canada," Luff wrote. The ports controversy spurred Congress to try and revamp the way such contracts are approved. But the House of Representatives and the Senate passed competing bills and the path to compromise is unclear.
(c) Reuters 2006. All rights reserved.
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