Mitsui to make offer for Singapore's Portek to expand ports: Update 2

Mitsui & Co., Japan’s most acquisitive company, plans to offer about $221 million for Portek International to expand its logistics business in emerging economies.

The industrial, commodities and services group intends to pay $1.40 apiece for all Portek shares, 17% higher than a June 22 offer of $1.20 each made by International Container Terminal Services Inc., according to a statement to the Singapore stock exchange today. Portek’s founders agreed to sell 51.3% of outstanding shares, Tokyo-based Mitsui said.

Buying Portek, which operates port terminals in Indonesia and Africa, would help the Japanese group expand its cargo loading and unloading facilities business in emerging markets. Mitsui, with cash and near cash items rising to an 18-year high of 1.44 trillion yen ($22 billion) as of March 31, said it aims to increase the port operator’s efficiency.

 

“For Portek, being part of a larger group is better when you want to acquire ports in emerging countries,” said Goh Han Peng, an analyst at DMG & Partners Securities Pte in Singapore. “The acquisition will enable Mitsui to gain immediate access to emerging market port operations.”

ACQUISITION SPREE

The purchase would be Mitsui’s biggest this year outside Japan after the 3.3 billion ringgit ($1.3 billion) buyout of Kuala Lumpur-based hospital operator Integrated Healthcare Holdings completed in May. The group has spent $17.3 billion since 1999 on 200 acquisitions, the most among Japan- based companies, according to Bloomberg data.

 

Portek gained as much as 6.4% to a record $1.405 in Singapore before trading was halted at 10:15 a.m., pending an announcement, with the stock at $1.400. Trading will resume at 2:15 p.m. local time, according to a filing. Portek officials weren’t immediately available to speak when contacted by phone.

 

Mitsui gained as much as 3% to 1,445 yen and traded at 1,440 yen as of 1:01 p.m. in Tokyo. International Container Terminal fell as much as 2.2% to 52.50 pesos in Manila.

 

International Container Terminal is studying its options “to determine what’s best for our shareholders,” Rafael Consing, treasurer at the Manila-based company, said by phone. An International Container Terminal unit owns 16.7% of Portek, according to data compiled by Bloomberg. HSBC Holdings Plc is advising the Philippine company for the Portek offer.

 

Mitsui doesn’t own shares in Portek, according to a statement by Nomura Holdings Inc., which is advising the Japanese company on the deal.

 

Portek, which also makes port cranes, reported net income of $7.26 million in the six months ended Dec. 31, 21% more than a year earlier. Sales climbed 4.4% to $65.7 million. The company handled 392,000 20-foot containers in the July-December period, 0.5% more than a year earlier.