TEESPORT operator PD Ports was last night waiting for a counter-bid from a consortium of investors.

PD had initially approved a bid from consortium Endeavour Ports, but switched its allegiance yesterday after a higher offer of £260m from Australian infrastructure business Babcock and Brown.

Endeavour's offer valued the company at £246m.

Babcock is believed to support PD's plans to build a £300m container terminal on the Tees, which would bring up to 7,000 jobs to the region.

PD Ports directors are recommending the latest bid to the group's shareholders.

PD Teesport is Britain's second largest port by volume - but the board has still to hold talks with Babcock, which told Bloomberg at the weekend it had been looking at PD for about 18 months.

All eyes will now be on the response of the Endeavour consortium, which is made up of private equity group 3i, Australian financial services firm Challenger, which is owned by Australia's richest man, Kerry Packer, and Australian fund manager Industry Funds Management.

PD Ports chairman David Harding said: "We are satisfied that Babcock and Brown Infrastructure is a suitable long-term owner of the business."

Babcock and Brown chairman Phillip Green said: "PD Ports fits well within our investment criteria, providing stable cash flows with attractive measured growth opportunities."

On top of the £260m bid, Babock and Brown is also offering £77m for bonds held by PD Ports.

Yesterday, Endeavour said it was considering its position and that a further announcement would be made.

Babcock and Brown has 18 offices across Australia, the US, Europe, Asia and Africa.

Its infrastructure division, which has made the offer for PD Ports, is one of five operating groups and has airports and toll-roads among its businesses.

It is also the owner of Australia's second largest coal-exporting port.

Last month, Babcock and Brown agreed to pay £117m for the Cross Sound Cable, an underwater electricity cable running between New York and Connecticut, in the US.

Australian stock-market listed companies are particularly attracted to stable companies that offer a long-term investment return, such as ports, because many shareholders are pensions companies.