THE bidding race for Teesport owner PD Ports looked to be over last night as one suitor pulled out.

Australian infrastructure firm Babcock and Brown is in line to land Middlesbrough-based PD Ports after rival suitor, the Endeavour Ports consortium, declined to get involved in a bidding war.

Last month, Endeavour Ports tabled a £246m offer for the firm, which was backed by the board of PD Ports.

However, the board then switched camps, swinging behind a £260m takeover proposal from Babcock and Brown, which Australian-based Endeavour yesterday announced was more than it was prepared to pay.

PD Teesport is Britain's second largest port by volume and is lobbying the Government to halt expansion at ports in the South to allow it to invest £300m in a deep-sea container terminal on the Tees, which would bring 7,000 jobs to the region.

PD directors were confident the two Australian companies would take forward the company's growth plans, which are being backed by The Northern Echo through its Support Our Port campaign.

PD is believed to have caught the attention of suitors because of its plans and potential for growth in the coming years.

Babcock and Brown operates from 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 counts airports and toll-roads among its businesses. It is also the owner of Australia's second biggest coal-exporting port.

The Endeavour consortium was made up of FTSE 100-listed private equity group 3i, Australian finance services firm Challenger, which is run by Australia's richest man, Kerry Packer, and Australian fund manager Industry Funds Management.

Australian infrastructure funds are believed to be particularly attracted to investments such as ports, as they offer long-term growth and stability.

PD Ports expects to find out in the New Year if the Government is to approve plans for two ports in the south, at Felixstowe and Harwich.

If the plans are approved, a container terminal at Teesport would mean there was an overcapacity - meaning it would be less likely to go ahead.

PD is arguing that expansion on the Tees would help meet the aims of the Government's Northern Way strategy, which is to bridge the £29bn output gap between North and South.