JP Morgan PE arm to acquire Red Funnel?

Press reports say that the ferry business which was put up for sale in June is about to be sold.

The private equity arm of JP Morgan is said to be close to buying UK ferry business Red Funnel from Associated British Ports Holdings for about £70m cash.

The deal is likely to be announced in the coming days. The sale is expected to raise £60m-£70m, approximately £10m less than was estimated by analysts when the business was put up for sale in June. Valuations have been affected by high fuel prices.

ABP acquired Red Funnel in 1989 for £27m including debt. It also includes a towage business and the Vectis Transport Group. The ports group has been keen to realise value on a number of its holdings in anticipation of a major new six berth container terminal it wants to build on reclaimed land at Dibden Bay, opposite the Port of Southampton, at a cost of up to £600m.

ABP has also identified £75m of non-core port property that is presently leased that it can put up for sale. This property includes warehouses or facilities leased to companies that are not necessarily port users.

The sale of the leased property would form part of a programme to dispose of £200m of port-located property, which directors said could be completed by the end of next year.