Singapore’s PSA International Pte said it won’t raise its offer for Peninsular & Orient Steam Navigation Co., giving up a takeover bid that might have added 29 ports to the company and helped it surpass Hutchison Whampoa Ltd.
PSA will refrain from topping DP World’s 3.88 billion-pound ($6.8 billion) bid for P&O, the company said in a Regulatory News Service statement today. DP World, Dubai’s port company, raised its initial bid after PSA offered 470 pence a share on Jan. 26. For PSA, to pay more than this price would not be compatible with commercial business sense and PSA’s future success,’’ PSA said in the statement.
The acquisition of 168-year-old P&O, which operates harbor terminals from Buenos Aires to Marseille, would have made PSA the world’s largest port operator and derailed DP World’s ambition of becoming the third biggest. PSA, relying on Singapore for more than half of its volume, has been expanding overseas. ‘Considering the deep pocket Dubai has with higher oil prices, it’s not an easy game for PSA,’’ Michael Chan, an analyst at Macquarie Securities in Hong Kong, said. ‘Maybe PSA can look for more cooperation opportunities and get a win-win situation where both sides can survive.’