Dubai Port Deal Is Delayed Over Protest

By JANE WARDELL

Dubai Port Deal Is Delayed Over Protest

Sat Mar 4, 2006 01:49

Dubai Port Deal Is Delayed Over Protest

By JANE WARDELL
The Associated Press
Friday, March 3, 2006; 12:40 PM

LONDON -- A Miami company objecting to the takeover of British shipping company P&O by Dubai's state-owned DP World said Friday it has been granted the right to take the case to Britain's Court of Appeal _ a move that puts the deal on hold.

Miami-based Eller & Co., which says its business could be harmed by U.S. concerns over a United Arab Emirates company controlling significant operations at six major U.S. seaports, said Britain's Court of Appeal would hear its petition for an appeal on Monday.

Duncan Robertson, the United Kingdom official representative of Eller & Co. outside the Royal Courts of Justice in London Thursday March 2, 2006. Eller, which provides cargo handling services to 90 percent of cruise ships in the Port of Miami, USA, had a last minute appeal dismissed by Justice Warren as he gave the required go-ahead for the Dubai based DP World's 3.9 billion pound (US$ 6.8 billion) acquisition of the Peninsular and Oriental Steam Navigation Co. ( P&O. ). The deal has caused uproar in the United States among lawmakers concerned about port security and that the United Arab Emirates company would own significant operations in six major US seaports. The judge did give Eller a stay till 1500 local Friday to allow them to go to the Court of Appeal. (AP Photo/Alastair Grant) (Alastair Grant - AP)

If the right to appeal is granted, the higher court will immediately hear the case.

"We don't take the decision to appeal lightly," Eller said in a statement issued in London. "However, we are deeply concerned for the future of our business and the livelihood of thousands of our staff and contractors and we will do everything in our power to secure their future."

P&O runs shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia _ a fact that has caused an uproar among lawmakers and businesses in the United States concerned about an Arab company taking over the ports.

DP World has attempted to defuse some of the tension by submitting itself to a second 45-day investigation by the U.S. government, despite already receiving regulatory approval for the deal.

The 3.9 billion pound ($6.8 billion) acquisition of the Peninsular and Oriental Steam Navigation Co. needs approval by the High Court _ approval that was granted Thursday by Justice Nicholas Warren.

However, Warren placed a hold on his ruling to allow Eller to take the case to the higher court, and it will not become effective unless the Court of Appeal refuses to hear the case.

Lawyers for DP World have warned that a delay beyond Friday means the company will not be able to access the millions of dollars it needs to pay shareholders on time. The deal was previously scheduled to be completed Thursday.

Both P&O and DP World will incur hefty costs while the case drags on and lawyers have said they intend to pursue Eller for the High Court costs when the appeal is decided.

P&O noted that Warren refused to grant Eller the right to appeal _ but allowed the company to approach the higher court directly _ because he believed it had little chance of success.

"The boards of P&O and DP World remain confident of concluding the transaction on the agreed terms," the shipping firm said in a statement.

President Bush has supported the takeover deal and lawmakers initially opposed seem to have softened slightly, tempering calls for an immediate vote to block the takeover. Many said the new probe reassured them and negated the need for legislation for now.

A U.S. federal judge has also ruled against a request by New Jersey to order an investigation into the takeover.

Warren said in his ruling Thursday that U.S. concerns about port security and threats of port authorities withdrawing business were partly fueled by Eller and that he did not find them credible.

He also dismissed Eller's claim that P&O allowed a series of procedural failings during the bid process, including the misdirection of letters to shareholders in Australia that left them uninformed about crucial meetings.
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