Canadian teachers buy OOIL’s North America terminals for $2.35 billion

Canadian teachers buy OOIL’s North America terminals for $2.35 billion    A Canadian teachers’ pension fund has agreed to pay $2.35 billion for four terminals located in two of North America’s busiest ports from the Hong Kong-based parent company of container shipping line OOCL, Orient Overseas (International) Limited (OOIL).
   The Ontario Teachers’ Pension Plan Board will pay the sum in cash for the terminals, two of which are in the Port of New York and New Jersey and two of which are in Vancouver, Canada. In addition, the pension fund will assume $60 million of net debt.
   Being sold are:
   * TSI Terminal Systems Inc. which operates both Deltaport and Vanterm in the Port of Vancouver.
   * New York Container Terminal on Staten Island, N.Y.
   * Global Terminal in Bayonne, N.J.
   OOIL’s four terminals had sales of $444.3 million on throughput in the 12 months ended June 30 of 2.57 million TEUs.
   The transaction is expected to be completed by the end of the first quarter 2007, subject to approval by OOIL shareholders and regulators.
   The Ontario Teachers’ Pension Plan is an independent corporation responsible for investing the $96 billion (Canadian dollars) fund and administering the pensions of Ontario’s 163,000 elementary and secondary school teachers and 101,000 retired teachers.
   The deal highlights the growing interest from financial institutions and soaring value of port assets. Initial estimates put the value of OOIL’s portfolio at between $1.1 billion and $1.3 billion.
   The final price was determined after conducting an open bidding process with defeated bidders said to include Goldman Sachs, which led a consortium in the recent takeover of Associated British Ports, and Australia’s Macquarie Bank, defeated for ABP and Patrick Corp. but successful in buying 40 percent of Hanjin Shipping’s terminal assets and rumored to be preparing a bid for Forth Ports.
   UBS acted as financial adviser to OOIL on the transaction.
   The inflated price of OOIL’s terminals indicates that state-owned Dubai Ports World could easily get more than the $700 million evaluation of its U.S. terminals, gained as part of the $6.8 billion purchase of P&O Ports in March.
   DP World is being forced to sell off the company after security fears among U.S. politicians about a foreign company controlling U.S. ports. The global port operator has said it will only sell to a U.S. company, a factor which might limit the final price.
   Deutsche Bank, which is running the process for DP World is calling for final bids by the end of this month.