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NOL shares rise on Hapag-Lloyd bid withdrawal

Singapore: The market price for shares in container giant Neptune Orient Lines has risen following its withdrawal from the bidding war for TUI AG's Hapag-Lloyd container shipping unit. Shares in the Singapore-based company gained 13% to S$1.76 at the close of trading in the city yesterday, according to Bloomberg. NOL is reported to have offered EUR3.5bn euros for Hapag- Lloyd, thereby falling short of the final selling price. A consortium of Hamburg tycoons, banks and local government won the bid for Hapag-Lloyd on Friday, taking control of German container liner for EUR4.45bn ($6.11bn).

"We submitted a bid that we believed fully valued Hapag-Lloyd and which addressed the challenging market conditions facing the container shipping industry, " said NOL Group president & ceo, Ron Widdows (pictured). "NOL will now put all its energy into managing through the current container shipping downcycle and providing our customers with the service they have come to expect of our organisation."

In a note to clients on Monday, financial experts Morgan Stanley attributed the rise in NOL stocks as positive because it will prevent the firm from overpaying for the acquisition as the shipping sector weakens. "The decision not to overbid for the Hapag-Lloyd acquisition makes strategic sense for Neptune Orient, particularly when the global container-shipping cycle could be heading toward one of the worst downturns in its operating history,'' Bloomberg quotes Morgan Stanley's Singapore-based analysts Chin Lim, Pey Herng Yap and Sophie Loh as having written in a report yesterday.  [14/10/08]

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