Deutsche Post could face a bid battle with UPS
Deutsche Post may have made the first move on Exel but it is unlikely to be the sole bidder.
UPS, the US package delivery company, and TPG, the Dutch logistics group, have also been touted as possible bidders.
Alastair Gunn, analyst at Arbuthnot Securities, says: “Whether it is Deutsche Post who ends up with Exel, is doubtful. I think UPS is likely to outbid them.”
He adds: “In terms of other companies coming in, nobody else can compete. It would be a waste of management time and energy.”
An acquisition of Exel by UPS would underline the Atlanta-based company’s ambition to increase its presence in Europe, where it is challenging the dominance of DHL, owned by Deutsche Post, and TNT, owned by TPG.
UPS has become increasingly reliant on international revenues, especially in Europe and Asia, to offset slowing growth and increasing competition in the US.
With Dollars 5bn (Pounds 2.78bn) of cash on its books at the end of last year, UPS has the muscle to make acquisitions.
Whoever wins Exel, it would signal an increase in foreign control over the fragmented UK market, which is divided between international competitors, such as DHL and TNT, and several small- and medium-sized domestic companies.
Analysts say Deutsche Post’s bid would depend on a rights issue to fund it or a cash and paper offer.
One analyst says: “Deutsche Post’s shareholders may question a cross-border deal and the company’s paper may not be so attractive. The company has a record of destroying shareholder value by over-paying for companies.”
Kuehne & Nagel International, the Swiss group, says it is not interested.
