Dubai Ports bidder ran Baltimore firm

Former auto handler seeks U.S. terminals

July 27, 2006|By MEREDITH COHN | MEREDITH COHN,SUN REPORTER

The former owner of a Baltimore-based auto handling firm said this week that he is interested in the U.S. port assets being auctioned by a Dubai company under pressure from Capitol Hill.

Many other bidders are expected to line up for the Dubai Ports World assets - which include terminals at the port of Baltimore and about two dozen other ports. Timothy Chadwick appears to be the first to publicly acknowledge interest.

Chadwick, who has dual U.S. and British citizenship, headed American Port Services, which handled cars imported and exported through Baltimore and other cities, until it was sold in 1998 to a British port operator that resold it to a New York private equity group this year.

Chadwick now runs a small British port operation. To bid on the Dubai assets, he's formed a U.S. company with former government and military officials, whom he didn't identify.

"We're one of many interested in buying these assets," he said in a phone interview this week. "I do know these assets that [DP World] has in Baltimore and elsewhere. They're perfectly good terminals."

Details of the auction were sent this week to potential bidders, including Chadwick. DP World said it wanted to identify a buyer by mid-September.

There is no asking price, but some analysts say it could be $250 million to $300 million, which Chadwick said might be about right. It's not known what DP World paid for the U.S. assets, which were part of the global portfolio of the British-owned Peninsular & Oriental Steam Navigation Co., or P&O. At the time of that sale in March, the company said the U.S. portion represented about 10 percent of the $6.8 billion package - a price analysts said was high.

There was no comment about bidders yesterday from P&O, which is still running the U.S. contracts as a separate company with Western leadership under agreement with the U.S. government. Lawmakers feared a company owned by the Arab government of Dubai would be a security risk and had threatened to stop it from operating in U.S. ports. After weeks of lobbying, DP World said it would divest itself of its new U.S. assets.

The lawmakers want the port terminals to be resold to a U.S. company. But few are large enough, so experts expect private equity firms and newly formed groups also to bid.

Chadwick said the political uproar over the Dubai ownership was "concerning" for foreign businesspeople, who have long invested in U.S. port assets. He said he initially approached P&O as a representative of his British company and was rebuffed. He said the new firm will have U.S. shareholders and directors and take security seriously.

Some in the local port community say Baltimore would benefit if Chadwick takes over the P&O assets.

"He knows the port of Baltimore," said Tom Matte, a consultant for ATC Logistics of Maryland, a company that was once a competitor to Chadwick's firm but now is owned by the same New York group.

"It would be great to get someone who knows our market and knows how to get more business," Matte said. "He's also got the financial wherewithal. It will be interesting to see if he can put something together."

At the port of Baltimore, P&O's operating agreement at Seagirt and Dundalk marine terminals expires in November 2007, which Chadwick said gave him pause because the port may not exercise its option to extend it.

"No decision will be made until there is a determination of the new owner," said J.B. Hanson, a port spokesman.

meredith.cohn@baltsun.com

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