The AP has reported that the Peninsular and Oriental Steam Navigation Co. said it has agreed to a $6.3 billion offer from Singapore port operator PSA International
-- a switch of alliances that is likely to spark a bidding war for the 165-year-old British maritime icon.
The approach from PSA trumped a 3.3 billion pound ($5.9 billion) cash offer from government-owned Dubai Ports World that
P&O agreed to in November.
P&O Chairman John Parker noted that the 470 pence ($8.40) per share offer from PSA, which would make the combined company the world's largest ports operator, was a 6 percent premium on the 443 pence ($7.91) offered by DP World.
Shares in P&O were trading above both offers Thursday, up 1.8 percent at 516.25 pence ($9.22).
PSA, which is wholly owned by Singapore's state-run investment firm Temasek, said an enlarged company would have the financial clout, scale and global network to compete effectively against rivals
A successful takeover would see P&O Chief Executive Robert Woods remain with the group to run the British businesses and chair the struggling ferries division.
Temasek is run by Ho Ching, the wife of Singapore Prime Minister Lee Hsien Loong. As owner of the Port of Singapore Authority, it is the second biggest ports group in the world.
The company was tipped by analysts as a likely suitor for P&O because the combined operations would give it terminals at many of the world's busiest shipping lanes.
The original deal with DP World, announced by both companies in November, would have made the combined company the third-largest ports operator in terms of capacity, lifting DP World up from its current rank as No. 7.