UPDATE 1-NZ's Port of Tauranga expects bid for container arm

(Updates with quotes, background)

WELLINGTON, Oct 23 (Reuters) - New Zealand's Port of Tauranga (POT.NZ) is expecting rival Ports of Auckland to bid for its container business, it said on Thursday, as a declining shipping business has port operators looking at consolidation.

Ports of Auckland first announced an interest in Port of Tauranga's container business about two months ago after talks between the two over a NZ$1.6 billion ($1 billion) full merger broke down earlier this year.

The two have been vying to be New Zealand's main port of call for global shipping companies and a full merger would have created a port handling two-thirds of all New Zealand cargo.

Port of Tauranga Chairman John Parker told the company's annual meeting that the two have not had any discussions since Ports of Auckland's expression of interest in the container business.

"Some two months have passed with no offer received, but we are advised that it is coming," Parker said in speech notes.

When Ports of Auckland first mooted a bid for the container business, Port of Tauranga said a rough calculation indicated its container arm would be worth more than Ports of Auckland's comparable business.

It also said it remained of the view a full merger between the two ports was a logical move.

Parker also reiterated the company's previous forecast that it expects to better its profit of NZ$42.1 million in the year to June 2008 in the current financial year.

Shares in the company, 55 percent owned by a regional authority, last traded down 5 cents at NZ$6.55. ($1=NZ$1.60) (Reporting by Adrian Bathgate)