At last a note of sanity has been injected into the battle for P&O, the UK ports and ferries group. PSA, the Singapore port operator, has walked away, abandoning the prize to Dubai’s DP World.

P&O is the last of the global operators likely to come on the block. This, as well as the deep pockets of the state-backed bidders, is why DP World is paying a 70 per cent premium to the undisturbed share price. Bear Stearns estimates that the price represents about $445 per twenty-foot equivalent unit, a measure of container capacity. This compares to an average $200-$400/TEU range in other recent deals for Asian ports assets, even though more than half P&O’s portfolio consists of lower-valued non-Asian assets. The deal is not the only aggressively priced one in the sector, but sets a new benchmark. Sector consolidation will now be a question of filling in the gaps. Neither Hutchison nor PSA, two of the four remaining international players, operates in the US. All would like to increase their presence in China. Potential acquisition targets may be sought in the next layer of the industry, where big regional players, such as SSA Marine, are mainly privately owned. PSA lost out this time, but the game is not over. Rumour has it that Temasek, its owner, may be considering another UK infrastructure asset, the airports operator BAA.