TEESPORT owner PD Ports is backing a takeover bid from Australian investor Babcock and Brown, it emerged at the weekend.

The owner of the Tees and Hartlepool ports has recommended its shareholders accept an offer of 150p a share, valuing the Middlesbroughbased company at £337m.

In a statement to the Stock Exchange, PD Ports chairman David Harding said: "We have received a significantly higher, unsolicited offer of 150 pence from Babcock & Brown Infrastructure.

"We are satisfied that Babcock and Brown Infrastructure is a suitable, long-term owner of the business.

"Accordingly, the board has decided to recommend this higher offer and advises its shareholders not to accept the offer from Endeavour."

PD's board had previously recommended an offer from the consortium known as Endeavour Ports, worth about 145 pence per share.

Endeavour includes British investment firm 3i, and two Australian companies - one of which, Challenger, is owned by Australia's richest man, Kerry Packer.

Babcock chairman Phillip Green said PD Ports fitted well with the company's investment criteria. Babcock owns Australia's secondbiggest coal export port.

Steven Boulton, Babcock's chief executive, told Bloomberg News the company had been looking at buying PD Ports for about 18 months.

PD Ports is an attractive takeover target because of its consistent profits. It also offers massive growth potential through its plan to build a £300m container terminal on the Tees, which would bring up to 7,000 jobs to the region.

But the port needs the Government to stop any more expansion in the South to allow it to expand at Teesport, the North-East's largest port.

The Northern Echo has been backing PD Ports' lobbying as part of its Support Our Port campaign.