A MULTI-BILLION pound bidding war for P&O was on the horizon yesterday following confirmation of a takeover approach for the ports and ferries operator.

The interest, which is thought to be from Dubai's state-owned ports firm DP World, is expected to draw out rivals, possibly from Denmark's AP Moeller-Maersk and Hong Kong's Hutchison conglomerate.

The Middle Eastern firm is understood to have contacted banks about financing a bid for P&O, which owns 27 container terminals around the world, including Southampton and Tilbury in the UK.

Shares in P&O jumped 30 per cent to 400p yesterday as the long-established UK company confirmed to the stock exchange that it had received a "very preliminary contact from a third party". The share price values P&O at about £3bn.

Takeover interest in UK ports firms has spiralled this year, with Mersey Docks & Harbour - the owner of ports at Liverpool, Heysham and the Medway towns of Sheerness and Chatham - bought by Manchester-based Peel Holdings for £780m.

PD Ports, whose PD Teesport site is the UK's second largest port by volume, confirmed earlier this month that it had also received a bid approach.

The Peninsular and Oriental Steam Navigation Company is one of the oldest names in British business and a successful offer would end more than 160 years of corporate history.

Founded in 1837, P&O carried cargoes throughout the empire to Sydney, Calcutta, Singapore, Hong Kong and other colonies.