As we have been predicting, Clydeport’s owner, John Whittaker and Peel Ports, the holding company for the his significant portfolio of ports, are bidding to buy Forth Ports, They lead the Northstream Consortium, announcing, on 5th March, its bid for Scotland’s other major central-belt port – Forth Ports on the west coast.
The Whittaker-led Northstream bid
The Northstream bid of £612 million has been rejected and is now treated as hostile, meaning that Forth Ports will not recommend its adoption by shareholders.
Forth Ports have released a statement saying that their Board, with Commerzbank, its financial advisers and Investec, its corporate broking advisers have studied the Peel proposals carefully and that the Board ‘is of the unanimous view that these proposals fall far short of the value of Forth Ports’.
They have agreed to meet the consortium after the release of their quarterly figures n 22nd March. But they will meet them as the sharehoilders they are not as an offeror. Arcus owns 23.4%, Peel 3.5% and RREEF 0.5%, a total joint holding of 28%.
There would be serious concerns on competition, should the combination of the ports owned by Peel Ports and Forth Ports come together.
Forth Ports owns 7 east coast ports, 6 of them in Scotland, facing to Europe. They are Grangemouth (Scotland’s largest container port), Dundee, Burntisland, Methil, Leith, Rosyth and Tilbury.
Peel Ports owns largely USA-facing Irish Sea ports, with Clydeport on the east of the Scottish central belt, Container Terminals on the east coast of Ireland at Belfast and Dublin; 3 in the north east of England, at Heysham, Mersey Docks and Harbour Company, Liverpool and the Manchester Ship Canal; and one on the south coast of England, Medway Ports. It is also know to be interested in a major development at Felixstowe.
Together this consolidation of commercial ports would present a threat to competition and Scotland would see Clydeport, Leith and Grangemouth owned by the same private sector company.
The warnings of precedent – Clydeport and Loch Striven
The prospect of both the Glasgow and Edinburgh major ports owned and led by the same private stranglehold interest is alarming – particularly when Clydeport and Peel Ports have no corporate social responsibility policy nor any interest in behaving with this responsibility.
The company’s entire handling of the situation which saw six large Maersk-owned container ships sent in to lay up in Loch Striven in Argyll, was unacceptable in every sense and is an operational exemplar for the Peel group.
Maersk was instructed to anchor the ships on the doorsteps of the small Loch Striven community – when alternative sites in the loch were at least equally appropriate.
Then, with uproar as the first two boxships, the discouragingly elderly, black hulled and American flagged Sealand Performance and Maersk Beaumont, the newest of the company’s B-class fleet anchored close inshore in front of the houses of the little community (see photograph below), Clydeport’s Managing Director,Margaret Mackay lied in writing.
Mackay informed Councillor Ron Simon that the ships would only be in Loch Striven for 6 months. No shipping company takes ships into semi-cold lay up for a 6 month period It is not remotely economic. At the same time Maersk were saying honestly that they expected their ships to be in the loch for 18 months.
Clydeport not only made no attempt to consult with the affected community before selecting the anchoring site for the raft but resisted utterly – and rudely – attempts to persuade it to do so by all levels of government – Government Ministers, MSPs from all parties, Argyll’s MP and Argyll and Bute Councillors.
Indeed, the dismissive contempt Clydeport’s MD, Margaret Mackay, has shown to elected representatives from Government Ministers to local Councillors has been a remarkable feature of this entire situation. It would be hard to describe the unprecedented and impertinent arrogance with which such responsible people have been treated. Their concern was simply that the company should talk to the Loch Striven community.
It may seem strange that the company was able to ignore such requests from Government sources – but it’s anachronistic statutory authority for the large port area puts it in a position of utter unaccountability to anyone, provided it does not break the law.
This is democratically unacceptable and we are calling for a legislated revision of that position.
The curious route to unaccountability
This unaccountability was also arrived at by a mysterious process which we are investigating.We reproduce here the passage in our rolling story on the Loch Striven situation describing the cusiour sequence of events that brought Clydeport to such an untouchable position.
(Loch Striven Ship Layups: rolling story) ‘Update 09.00 2nd September: Let’s ram home the constitutional point we’re making in our past update yesterday (below) and which we’re using Freedom of Information (FoI) legislation to pursue.
‘Early in 1992, the UK Government privatised the operation of the Clyde port area by creating Clydeport Limited and transferring to it certain ‘assets, rights and liabilities’ and retaining others in the continuing Clyde Port Authority. This was done under Statutory Instrument 1992 No 304.
‘Clydeport Limited was effectively a management buy out, run by management and staff formerly of Clyde Port Authority.
‘It was deemed necessary on 1st March 1992 – in this transfer to former public sector personnel experienced in Clyde Port Authority’s operation - to retain for the Clyde Port Authority: ‘all functions conferred or imposed on the Authority by any provision contained in the Clyde Navigation Acts 1858 to 1965, the Greenock Port and Harbours Acts 1913 to 1957, the Clyde Port Authority Orders 1965 to 1977 or any other local statutory provision.
‘The question is: If it was necessary on 1st March 1992 to retain such functions within a constitutionally senior authority, the nature of whose membership was also closely defined at this time – why, 17 months later on 4th August 1993, was it deemed right to dissolve the Clyde Port Authority and, in the words of Statutory Instrument 1993 No 1970: ‘On that day any property, rights and liabilities to which the Authority are entitled or subject immediately before that day are by virtue of section 7 of the Ports Act 1991 transferred to and become property, rights and liabilities of the Authority’s successor company, Clydeport Limited’.
‘Between the two Statutory Instruments came the offer for Clydeport Limited by Peel Ports / Peel Holdings – a private, for profit company freed by the dissolution of Clyde Port authority and the transfer to the company it acquired – Clydeport Limited – of what was nothing other than the right to supervise itself.
‘Curious, isn’t it?’
It is indeed.
The connections
It is worth noting that Tom Allison, the smooth and interestingly well connected operator who led the effective management buy out of the Clyde port operation and then obligingly sold the new, private sector Clydeport Limited to John Whittaker under a year and a half later, has since been a senior executive of Peel Ports, Clydport’s immediate line owner – and of Peel Holdings, John Whittaker’s uber-company.
It is also worth noting that the Consortium now mounting a hostile bid for Forth Ports includes, as well as Peel Ports, Arcus and RREEF, already holding shares with the Whittaker Peel empire. This is effectively a Whittaker bid.
In Scotland’s interests, this acquisition must be blocked
Lasciviously, the name under which the group are operating, Northstream Consortium, describes the planned rich income stream running from Scotland in the north right to the tax haven of the Isle of Man, in which Whittaker has made his home at Billown mansion.
His entrepreneurial career began in property and that remains a key interest, Much of his acquisition of British ports has been fuelled by the real worth of their traditional and undervalued dockside land and property stock.
Indeed it is the recession-reduced valuation of Forth Ports’ property assets that Whittaker is using to defend the low value bid the consortium has entered and it will be one of his key interests in the wished-for acquisition
This guy could be described as a surface raider who could have shown the Bismarck a thing or two – and could be described as an asset stripper. The business values that permeate his company are unevolved – he is, after all, in his 70s and, however commercially aggressive, the product of an earlier era. It shows. It is not to be replicated in Scotland or imposed upon it.
For Argyll is asking Jim Mather, the Scottish Government ‘s Enterprise Minister and Argyll’s MSP, to ensure by whatever legitimate means, that whoever buys Forth Ports – whether it is eventually Northstream or not – they should first demonstrate the adoption and implementation of a Corporate Social Responsibility policy in every area of their business holdings.
And all Statutory Authorities must have clear accountability structures added to the legal context within which they operate.
Scotland can only suffer from being prey to the ignorant business practices of another time and another place.