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Last Updated: Monday, 27 February 2006, 05:32 GMT
Review agreed in P&O takeover bid
Tankers about to dock at the port of Philadelphia
Dubai Ports will be taking control of six US ports
A Dubai company seeking a takeover of shipping company P&O has agreed to a 45-day review of the security impact, after concerns from a US bidder.

Dubai Ports World (DPW) aims to appease Miami-based Eller & Co, which will try to block the controversial 3.9bn ($6.8bn) takeover bid.

Leading critic Democratic Senator Hillary Clinton has praised the review but criticised the US president's role.

Dubai Ports (DPW) has said it was surprised by the outcry over the bid.

'Lacking leadership'

Republican and Democrat politicians have criticised the transaction, which would hand control of six US ports to DPW, based in the United Arab Emirates, claiming it would make the country more vulnerable to terrorism.

The senators also believe they have not been sufficiently consulted over an agreement that would hand over the management of six ports to the Dubai-based company.

The US firm Eller & Co has lodged a petition in London's High Court, saying the buyout would harm its interests.

We consider our company to be a friend of the United States
Michael Moore, Dubai Ports World

While backing the review, Senator Clinton continued to criticise President Bush.

She accused him of lacking leadership over the issue of homeland security and stressed that the review must be carried out in a rigorous and independent manner.

DPW, while agreeing to the security investigation prior to the deal, is still determined to proceed with the acquisition.

The company will also set up a separate subsidiary to run the ports, distanced from its owners.

"We consider our company to be a friend of the United States," Michael Moore, a company executive told BBC Five Live.

"We are simply trying to be helpful," he said of the 45-day review.

"It is clear that the nature of who we are, our operations and responsibilities is clearly being misunderstood."

Concessions

The company had already agreed not to take over the management of the US ports until security issues had been fully addressed.

However, this has not deterred critics of the deal.

New Jersey officials are taking legal action to try and block the deal, while the Port Authority of New York and New Jersey is seeking to annul P&O's 30-year operating licence, claiming it failed to seek permission for the transfer of ownership.

US PORTS OWNED BY P&O
Freight being unloaded at the Port of Philadelphia
New York, New Jersey, Baltimore, New Orleans, Miami, Philadelphia

The deal had been expected to be formally sanctioned in a hearing in the High Court on Monday.

However, a judge is now expected to hear Eller & Co's petition to have the deal blocked, made late on Friday evening.

Eller, which provides stevedoring services at the port of Miami, is expected to argue that the deal could be revoked in the US and that it breaches contractual agreements it has with P&O.

'Licence threat'

"There is a real prospect that the arrangement will lead to US port authorities revoking licences and leases held by joint venture companies which will cause sever financial losses," its petition states.

Dubai Ports World said it was "fully committed" to the deal, which would make it the world's third largest port operator.

The Bush administration is backing the takeover, arguing that it poses no threat to US security interests.

However, it has supported plans to allow more time for Congress to be briefed on the details of the transaction.

When Republicans and Democrats alike vowed legislation that would force a review of national security issues surrounding it, the president's national security adviser responded that such negotiations were between Congress and the company.

He said the White House was simply willing to go along with their conclusion as long as it did not block the deal.


SEE ALSO:
High Court bid to block P&O deal
26 Feb 06 |  Business
Arab firm to delay US ports deal
24 Feb 06 |  Americas
Bush threatens veto in ports row
22 Feb 06 |  Americas
US lawmakers criticise ports deal
21 Feb 06 |  Americas
P&O confident of Dubai takeover
20 Feb 06 |  Business
P&O shareholders back Dubai bid
13 Feb 06 |  Business


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