UPS could make hostile bid for European firm
UPS chairman and chief executive Michael Eskew said yesterday he would not “rule out” making a hostile bid for any large European logistics company.
The US parcels giant has been linked with Exel, the British supply chain group that last week agreed a pounds 3.7billion takeover by Deutsche Post, and has retained Goldman Sachs to advise it.
“If we think it helps and the customers need it, we would [make a hostile bid],” he said during an interview at the company’s global headquarters in Atlanta, Georgia. He declined to comment on UPS’s interest in Exel.
Sources close to the company said its interest in Exel had been “overblown”, indicating the firm was looking to “fill holes” in its international operations but not take on such a “huge” firm as Exel.
Kurt Kuehn, head of global sales and marketing, said: “Deutsche Post’s view is whoever is biggest, wins. Our view is who has the best business wins.”
He added: “Deutsche Post is amazing. Their appetite: it would have give me a stomach ache long ago.” UPS’s strategy is to build a global managed supply chain service.
The company, a conservatively-managed business which made $2.8billion ( pounds 1.59billion) in net revenues last year, has more than $5billion of cash on its balance sheet. It has never made a hostile takeover in its 98-year history.
Mr Askew said UPS was keeping a close eye on the liberalisation of postal services in Europe. He recently visited Downing Street, where it is thought he was briefed on plans to reduce and ultimately end the Royal Mail’s monopoly over low weight package and letter deliveries.
The acquisition of Lynx Express, the Nuneaton-based overnight package delivery firm, is expected to be formally closed next week. The firm will be rebranded as a UPS company.
Deutsche Post is paying 900p in cash and 0.25427 in new shares for each Exel share. John Allan, the Exel chief executive, is to run the combined companies’ contract logistics business – the largest in the world – from Exel’s existing head office in Bracknell.
UPS eyeing TNT?
JOURNAL OF COMMERCE, Web, Sec. ECOMM, p WP 09-30-2005
Shares in TNT rose as much as 4.5 percent on Friday after a German newspaper said UPS sees the Dutch mail and logistics company as a possible takeover target. German newspaper Die Welt in its Friday edition quoted UPS Senior Vice President Kurt Kuehn as saying, “It is a possibility. We are looking at it.” UPS Chief Executive Michael Eskew also told the paper his company considered acquisitions in the mail business and that he did not exclude the possibility of hostile takeovers. But Dow Jones quoted a Bear Stearns as saying UPS said the newspaper took Kuehn’s remarks out of context to suggest its interest in TNT. UPS did not immediately comment. The Dutch government holds a 10-percent stake in TNT, as well as a golden share, with which it can veto all other shares. TNT said last week it was investigating tax irregularities at subsidiaries that could impact its results. TNT shares had risen 3.9 percent to 20.78 euros by late morning. TNT has a leading position in the European express market and is the world’s second-biggest contract logistics provider after Britain’s Exel, the latter having agreed to a $6.5-billion takeover bid by Deutsche Post.
