Shipping, shipbuilding, offshore news

February 25, 2006

Efforts to block DP World deal continue

U.S. lawmakers questioning the deal seem unimpressed by a statement from DP World that it would "segregate" U.S. port operations it is acquiring in its takeover of P&O.

"A brief period for the company to continue lobbying without the full 45-day investigation that should have been done from the beginning is simply not enough," said Senator Chuck Schumer (D.-N.Y.) "If the President were to voluntarily institute the investigation and delay the contract that would be a good step. But a simple cooling off period will not allay our very serious concerns about this dubious deal."

Senators Schumer, Norm Coleman (R-MN), Bob Menendez (D-NJ), Olympia Snowe (R-ME), Hillary Clinton (D-NY), Susan Collins (R-ME), Tom Coburn (R-OK), and Jack Reed (D-RI) are set to introduce emergency legislation Monday that, they say "will suspend the Dubai port deal immediately."

The bipartisan emergency bill will:

Require the President to place a stay on DP World's takeover of P&O ports.
Require the Committee on Foreign Investment in the United States commence an immediate 45-day investigation on the takeover's effects on national security. The bill also requires CFIUS to coordinate with other agencies, such as the Coast Guard, and to take into consideration past security assessments of ports operated by DP World.
Require the Secretaries of Homeland Security and the Treasury to prepare a full report and brief members of Congress on their findings.
Upon receiving the report, Congress would have the authority to disapprove the sale within thirty days.

Rep. Pete King (R-NY), Chairman of the House Homeland Security Commitee, will introduce companion legislation in the House.

Meantime, House Republican leaders will meet Tuesday with Speaker Dennis Hastert (who has been critical of the deal) to plan strategy.

The deal is also facing challenges in the courts. Yesterday, they crossed the Atlantic.

Eller &: Co. on Friday petitioned Britain's High Court seeking to block the entire $6.8 billion takeover of P&O by DP World.

An Eller subsidiary in Miami has already filed suit in the U.S.

The U.K. High Court had been expected to give its approval Monday in a procedure that would normally be a formality for a transaction that has gone through all the required regulatory processes.

However, in their last-minute petition Friday, lawyers for Eller cited a number of grounds for rejection of the deal, including a "real prospect" that U.S. authorities would revoke approval.