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NOL readies bid of up to $7bn for Hapag-Lloyd

Singapore: Neptune Orient Lines Ltd. is ready to make a cash offer for Hapag-Lloyd of $6 billion to $7 billion and is confident of winning the German container shipper despite an expected bid from a consortium led by the German city of Hamburg, two people familiar with the situation told the Wall Street Journal yesterday. "They [NOL] are expecting Hapag's formal invitation for bids at the end of this month or early June. Once the request for offers lands, the [NOL] bid will be made," said one of the people. Hapag-Lloyd, the shipping arm of German tourism company TUI AG, has held talks with NOL about a possible takeover since the beginning of the year. A deal would make NOL the world's third-largest container-shipping firm by capacity.
NOL Chief Executive Thomas Held confirmed last month that he was interested in buying Hapag-Lloyd, and TUI said it was in the process of approaching potential buyers.
One rival bid likely will come from the city of Hamburg, which has taken a 20% stake in a consortium that plans to make an offer for Hapag-Lloyd, Hamburg Financial Secretary Michael Freytag said Tuesday. While the consortium would give Hamburg an indirect stake in Hapag-Lloyd, Mr. Freytag said the city doesn't rule out taking a direct stake.
Other members of the newly formed consortium are German logistics company Kuhne Holding AG and Hamburg private bank M.M. Warburg & Co.
"NOL is not too concerned about the German bid. National feelings aside, the city of Hamburg's offer sounds complicated, and in this process, money and how fast you can dole it out will be the determining factor," the second person familiar with the deal said. [23/5/08]

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