US Edition Forth Ports
£16.05 +82p
Questor says Hold
When Forth Ports rebuffed a £14 a share bid approach from the Northstream consortium last May, it took soundings from its other shareholders over what might be an acceptable takeover price.
The message was clear: even £15 would not be enough. But it would be nearer the mark.
Such news filtered back over the waves and now the key member of Northstream - Arcus' European Infrastructure Fund - is sailing solo with a renewed tilt at the last of the major quoted port groups.
Arcus, which is already Forth's biggest shareholder with 22.8pc, has tabled a proposed £16.30 a share offer, valuing Forth at £746m - as well as agreed to pay a 20p a share final dividend for 2010.
This time Forth - the owner of Scottish ports including Leith, Rosyth and Grangemouth as well as London's Tilbury docks - has opened its books.
The mooted price is not the £20-plus that might have been required at the height of the property boom when valuers were salivating over the potential of Forth's development assets.
Back in 2005, such assets were valued by DTZ at £285m – a value they pretty much held until 2007.
Then came the crash. DTZ's 2008 valuation dived to just £60m - and while it rose to £74m in 2009, that partly reflected Forth taking full ownership of Edinburgh's Ocean Terminal development.
That's one of the problems with valuing Forth: there is clear potential in its property estate but realising it is another story.
There are other opportunities, too, biomass plants on surplus land in the Scottish ports and the fillip construction works for the 2012 Olympics are bringing to Tilbury. But much of this falls into the box marked "potential".
As for now, the Arcus proposal values Forth at about 29 times expected earnings – and it's hard to see a counter-bidder, given Arcus's chunky stake. It's noticeable, too, that Arcus is only doing "confirmatory due diligence", implying a deal is not far away.
There's a risk, of course, of a final slip. But it looks only a matter of time before Forth's boat comes in. Investors should not have long to wait. Hold.