LONDON (Reuters) - Forth Ports accepted a 760 million pounds takeover offer from Arcus, the infrastructure investor that is already its largest shareholder, ending a year-long pursuit of Britain's only listed ports group.
The buyout by Arcus -- a former European unit of collapsed Australian investment firm Babcock & Brown -- is about 19 percent above an offer Forth rejected last year, and highlights a wider recovery in infrastructure dealmaking.
Arcus, which has a 22.8 percent stake in Forth, said on Tuesday it will pay 1,630 pence per Forth Ports share it does not already own, plus a dividend of 20p per share to existing shareholders, valuing the company at 760 million pounds.
Including debt -- a key consideration for financial owners -- the deal places an enterprise value of about 1 billion pounds on Forth Ports. Net debt was 231.5 million pounds at end-2010.
"The Arcus offer gives Forth Ports shareholders the opportunity to realise their investment for cash at a fair price," Forth Ports Chairman David Richardson told reporters.
"As a shareholder for three years Arcus always said it was impressed with Forth Ports' management and I'd like to think that current management have a future in the business."
Forth manages and owns six ports in Scotland, including Grangemouth, Dundee and Rosyth, as well as Tilbury on London's river Thames.
Takeovers by infrastructure funds, who target assets such as roads and ports for their stable, long-term revenue streams, ground to a near-standstill during the financial crisis.
They have since recovered as the economic outlook has brightened and debt has become more available: Thomson Reuters data shows acquisitions involving such funds topped $24.6 billion (15 billion pounds) last year -- more than double 2009's figure, but still less than half 2007's record $54.8 billion.
Forth gave Arcus access to its books earlier this month after Arcus declared its hand.
The price represents a 14.3 percent premium to Forth's closing share price on February 21, the last day of trading before press speculation about a deal.
Shares in Forth Ports were up 1.4 percent at 1,637 pence by 1:50 p.m., valuing the business at around 750 million pounds.
"Given the recommendation by the Forth Ports board, and the substantial shareholding of Arcus, we do not anticipate a competing offer," said Arbuthnot analyst Gerald Khoo.
Forth Ports last year fought off three takeover attempts by the Northsteam consortium, made up of Arcus, and two fellow infrastructure investors, Deutsche Bank's RREEF unit and the Peel Group.
Northstream's final 640 million pound takeover approach was knocked back by Forth Ports last May.
Forth is looking to gain planning approval for onshore wind and biomass facilities at its Scottish ports. It also owns 400 acres of land in Edinburgh, marine terminals for oil and gas export and has significant property interests.
The company said its property assets were valued at 115.5 million pounds at the end of 2010, up 6.4 percent from 2009.
Arcus, which was bought by management from Babcock & Brown two years ago, has stakes in rail leasing companies Alpha Trains and Angel Trains as well as port operator Euroports and toll road group Brisa.
Arcus partner Simon Gray said the fund planned to invest in and grow Forth Ports and was committed to maintaining it as a "a key UK port operator headquartered in Scotland."
A person familiar with the matter said Arcus was likely to accelerate some asset sales, such as part of Forth's land bank -- the firm owns 2,000 acres of freehold land.
Arcus said it would pay the extra 20 pence per share dividend by May 13.
Forth Ports reported a 2010 underlying pretax profit of 36.6 million pounds, 1 million ahead of a Thomson Reuters I/B/E/S forecast poll, on revenues 5 percent higher at 181.9 million.
Commerzbank and Gleacher Shacklock advised Forth Ports. JPMorgan Cazenove advised Arcus.
Forth will be bought by Otter Ports, a unit of Arcus European Infrastructure Fund 1.
(Additional reporting by Arno Schuetze in Frankfurt and Tracy Rucinski in Madrid; Editing by Jane Merriman and Jon Loades-Carter)