London: Final bids for Istithmar's port and shipping agent, Inchcape Shipping Services, are due May 28 and offers could reach as much as $800 million (Dh2,937 million) amid an aggressive auction, people familiar with the situation said yesterday.
The five shortlisted bidders are Cinven Group, CVC Capital Partners, Carlyle Group, General Atlantic, and Canadian pension fund Omers, or the Ontario Municipal Employees Retirement System, and all five are likely to submit final bids, the people said.
Bidding is aggressive with prices around 11 times earnings before interest, depreciation and amortisation, or Ebitda, amounting to approximately $70 million, and some bidders could go as high as $800 million, one person said. Inchcape Shipping Services doesn't make its financial performance publicly available.
Istithmar, an investment subsidiary of the Dubai World conglomerate, hired Merrill Lynch and Royal Bank of Scotland to run the sale process.
The two advising banks are offering staple financing of $350 million to potential buyers, one person previously told Dow Jones. The potential buyers are also discussing financing arrangements with other banks, the person added. Staple finance is typically arranged by the vendor's advising bank in the sale of a business. The winning bidder has the option to accept the loan on offer or make its own financing arrangements. One person familiar with the matter said other banks offering finance could offer debt levels in excess of that being offered by the staple providers.
