Potential Buyers Eye £1.2bn Sale of PD Ports by Brookfield

Potential buyers are showing interest in one of the UK’s most significant ports as Brookfield Asset Management prepares to sell PD Ports for £1.2 billion.

Investment banks have started identifying prospective buyers for Teesside-based PD Ports, which also operates in Felixstowe, Hull, and Immingham in Lincolnshire.

The South Tees Development Corporation (STDC), chaired by Lord (Ben) Houchen, is readying a bid for PD Ports with joint venture partners. However, there are concerns within Houchen’s team about potential exclusion from the process, according to industry sources.

Tensions between Houchen and Brookfield have existed since a 2021 auction was halted due to a legal dispute over access rights, with a High Court ruling in PD Ports’ favor. STDC, a previous bidder, was accused of attempting to gain a discount through the legal proceedings, a claim it denied.

City sources indicated that entities such as Peel Ports, owned by billionaire John Whittaker, overseas pension and infrastructure funds, and Australian firm Macquarie have shown early interest. Associated British Ports and Dubai’s DP World, owner of London Gateway port and P&O Ferries, have also reportedly been approached.

Advisers from Royal Bank of Canada and CIBC are expected to manage the potential sale, though a Brookfield insider stated that formal solicitations for bids had not yet begun.

PD Ports employs 1,400 staff across 11 UK sites. Previously shelved sale materials revealed the company owns 2,400 acres of freehold property and was generating £75 million in annual earnings before interest, tax, depreciation, and amortisation, a figure that has reportedly increased to £100 million.

Originating in 1808 with the Tees Navigation Company, PD Ports rose to prominence as Middlesbrough became a key iron production hub. The Teesside dock, operational since 1963, has handled steel and fertiliser from nearby ICI works.

Brookfield acquired PD Ports for £1 in 2009, agreeing to assume substantial debts that had previously destabilized the company.

PD Ports could play a crucial role in the northeast’s industrial revitalization, leveraging Teesside’s tax-efficient freeport status and proximity to Teesworks, a joint redevelopment venture focused on the 4,500-acre former SSI steelworks site.

Recently, Chris Musgrave and Martin Corney, lead developers and majority owners of Teesworks, agreed to renegotiate their stake to offer better value for taxpayers.

Houchen had been accused of cronyism for granting them a majority stake, but a government inquiry found no corruption, though it highlighted “issues of governance and transparency that need to be addressed.”

All parties declined to comment.