Michael Pascoe writes:
Standing on the dockside smiling as
Singapore and Dubai go each other with baling hooks for P&O should be Chris
Corrigan and Paul Little. The losers from the fight though will be waterfront
customers, which means all of us.
Whether or not Little’s Toll Holdings
eventually succeeds in taking over Corrigan’s Patrick – and I increasingly
doubt it will – the Patrick business will be worth a little more thanks to the
The ACCC has already made rumblings about
the wharfie duopoly, resulting in the usual he-protests-too-much by Corrigan.
An expensive auction for one half of the duopoly though will only entrench it.
In the fight so far, Singapore’s PSA
International has trumped Dubai Ports by offering 470 pence a share for P&O
– 3.5 billion pounds – 27 pence more than the sheiks, but Dubai is not expected
to surrender yet with the London market talking about a final price around 525
What tends to happen in a well-contested
takeover is that the winner ends up paying more than the business is actually
worth. The result from that is a wave of cost cutting, but certainly no price
cutting. Whoever ends up owning P&O, they will be very happy not to rock
the pricing boat in Australia while shaving whatever costs they can.
That’s why importers and exporters are
likely to finish up providing fatter margins for Patrick and why the ACCC will
continue to have something to grumble about.