Marine Log

March 15, 2006

DP World gives details of port business sale

DP World has announced further details of the process by which all of the business of P&O Ports North America will be sold to an unrelated U.S. buyer. Meantime, speculation that the Carlyle Group would be that buyer looks to be unfounded.

The sale process will be supervised by executives from P&O's group head office in London.

The New York office of Deutsche Bank Securities, Inc. has been mandated as financial adviser for the sale of the whole of P&O Ports North America. New York law firm Sullivan & Cromwell LLP has been appointed as legal advisers for the sale, with the Washington, D.C. office of Alston & Bird LLP assisting on regulatory matters.

Preparation of financial, corporate and legal information required for the sale has commenced. Interested parties will be furnished with information on the business and invited to make offers. Offers will be assessed by reference to value, deliverability and the continuity of management, employees and customers.

In parallel with this sale process, discussions will take place with port authorities, joint venture partners and labor representatives to facilitate a smooth transition of the business to a new owner. An expedited sale process is underway and with the cooperation of the port authorities and joint venture partners, it is expected that a sale can be agreed within four to six months. Until the sale is completed, P&O Ports North America will be operated independently from DP World in accordance with a commitment announced on February 26, 2006.

There has been speculation that the Carlyle Group could be a buyer. That has been fueled by the fact that on March 10, Carlyle announced it had established a team to conduct investments in the infrastructure sector, including investments in transportation and water facilities, airports, bridges, ports, stadiums and other public infrastructure.

A closer look at Carlyle's published goals for this new venture indicate that it looks to be more about owning infrastructure such as ports rather than about running it. Indeed, the Baltimore Business Journal earlier this week quoted Carlyle Group Chris Ullman as saying of a possible acquisition of the P&O Ports North America business: "We have zero interest in that deal, and we will continue to have no interest.