Shares in Forth Ports are expected to soar this morning as an Australian investment firm confirms that it has built a stake of more than 15 per cent in the company.

The purchase, by Babcock & Brown, of what insiders described as a “significant” stake in Forth Ports will intensify City speculation of an imminent takeover of the quoted ports operator that could value the company at more than £1.1 billion.

The stakebuilding is thought to have doubled Babcock’s holding in the group.

Forth Ports shares closed at £19.38 on Friday. It is thought that Babcock would have to offer £24 a share to bring Forth’s board to the table.

However, any approach may trigger a bidding war for the company. Rival bids could come from Macquarie, the Australian bank and infrastructure operator, and 3i, the British private equity firm.

Forth Ports operates seven ports in Britain, six in Scotland and one east of the Thames Barrier at Tilbury, Essex, which is expected to benefit as the main gateway for materials needed for the 2012 Olympic Games, facilities for which are being built at nearby Stratford.

The ports operator is also sitting on 450 acres of land ripe for development, most of it for housing, which was valued at £277 million a year ago but which could be worth at least four times as much if detailed planning applications were to be approved.

A spokesman for Forth Ports said: “Their [the Babcock] investment clearly endorses both the quality and significant prospects for the Forth Ports business.”

Last Friday brokers at UBS up-graded their price target on Forth Ports shares from £19 to £20.11.

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