What began with an unsolicited proposal gave rise to a bidding war that saw Carlyle Group and even JPMorgan Chase toss a hat in the ring.
Now, a year after a $4 billion APM Terminals (APMT) offer to run the Port of Virginia inspired Carlyle, Wall Street firm JPMorgan, not to mention RREEF Infrastructure, to follow suit, ‘Old Dominion’ has chosen to take its ball and go home.
Governor Bob McDonnell said he agreed with a decision to let the port remain publicly managed with current operator Virginia International Terminals (VIT) converting from a nonprofit affiliate to a limited liability company (LLC).
McDonnell, in announcing the port will remain publicly operated, said he supported the Virginia Port Authority (VPA), which argued against privatising the three-decade-old seaport in favour of streamlining and strengthening the VIT.
With Carlyle, in Washington, D.C., dropping its bid last October, followed by RREFF, APMT, the container terminal operator, then JPMorgan, via JPMorgan IIF International Acquisitions, remained interested in taking over the Port of Virginia.
Virginia opened bidding after APM made its proposal. Carlyle offered $2 billion, while RREFF put up $3.3 billion. APM was offering $4 billion for a 48-year lease, as well as ownership of the Portsmouth Marine Terminal, which it currently operates.
The Portsmouth Marine Terminal, along with the Norfolk International Terminal, Newport News Terminal and Virginia Inland Port comprise the Port of Virginia.
In December, JPMorgan IIF International Acquisitions replaced RREFF – the Deutsche Bank Group affiliate dropped out shortly after filing its offer.
Virginia Secretary of Transportation Sean Connaughton did not respond to a request for comment. The state has a robust public-private partnership (PPP or 3) law, put in place in 1995, for transportation.
Fitch Ratings warned decision to keep the Port of Virginia private could create “negative momentum” against seaport privatisation.