Former deputy CEO of Neptune Orient Lines (NOL) Lim How Teck has thrown a spanner into the works today, suggesting that NOL should carve out its terminals business before selling the line to France’s CMA CGM.
Speaking to Singapore’s The Business Times, Lim said: “Temasek has many choices. While NOL’s book value is S$1.38, this valuation fails to take into consideration the mark-to-market value of the terminals.
“I think many parties will be interested in the terminals. The terminals are a prize catch and of strategic interest for PSA. If CMA is interested but is not going to offer mark-to-market price for the terminals, NOL can sell them to PSA.”
NOL and CMA CGM are currently locked in negotiations, having entered into an exclusivity arrangement last month for the potential acquisition. With a deadline of December 7, CMA CGM is reported by Bloomberg to be in talks to raise finance with banks including BNP Paribas SA, HSBC Holdings Plc and JPMorgan Chase & Co.
NOL operates terminals at Los Angeles and Dutch Harbor on the US West Coast, Kobe and Yokohama, Japan and Kaohsiung, Taiwan. It also has interests in Laem Chabang, Thailand, Ho Chi Minh City, Vietnam and Qingdao, China.
“There will always be buyers for standalone liner businesses since there are cost synergies, geographical expansion advantages and deeper dominant sectors on acquisition – with or without terminals,” Lim added, responding on whether the liner business could be offloaded should the terminals business be sold separately.