THE battle for PD Teesport is escalating after a rival operator announced it would consider a bid.

The owner of Tees and Hartlepool ports could soon be on the market after its Japanese parent company hired NM Rothschild to advise on the potential sale.

PD Teesport is expected to attract considerable interest if owner Nikko Principal Investments proceeds with plans to sell the ports business it acquired as part of the £570m purchase of Powell Duffryn in November 2000.

Mersey Docks and Harbour, Britain's second biggest ports group, has confirmed it would be interested in acquiring the Teesside operation.

Chief executive Peter Jones said that were Nikko to put Teesport up for sale, he would "have to look at it", but would only consider making a bid if it enhanced shareholder value. Mersey Docks owns the ports of Liverpool, Dublin, Heysham, Sheerness and Chatham.

Analysts believe it needs a major acquisition to secure long-term growth, but with port sales few and far between, the competition would be fierce.

News that Nikko had hired NM Rothschild to consider a £500m sale of Teesport emerged last month.

The Japanese investor is well known for buying ailing businesses and building them up before selling them on, usually five years after the original purchase.

Since acquiring Teesport, it has gone from strength to strength, installing a new board to drive expansion plans. The company has opened a second container terminal at Tees Port and more than a hundred staff have been taken on in the time PD Teesport has been in charge.

It has been working with steelmaker Corus to look at ways of developing its disused wharf for exporting large quantities of steel when the Redcar works becomes a merchant mill in 2006.

Operations at Hartlepool Port have been scaled back in recent years as more companies move to the deep water facility at Tees Port.

Hartlepool once handled more than a million tonnes a year, but that fell to 611,000 tonnes last year.

PD Teesport has been working with Tees Valley Regeneration on a planning application to turn two-thirds of the 300-acre site into a mixed-use development.