CEO of Springer's troubled postal arm to quit (Germany)

The head of Axel Springer’s troubled postal business PIN Group is quitting and withdrawing an offer to buy the unit, according to a magazine report on Tuesday, casting uncertainty over PIN’s future.

Last week, German publisher Springer pulled the financial plug on its loss-making mail service company and said it was looking to sell its majority stake.

Springer has been considering options for its stake in PIN ever since the German government last month agreed to impose a minimum wage in the sector higher than that paid by PIN.

The publisher said it was now no longer willing to provide more financial support to PIN group, which PIN Chief Executive Guenter Thiel has said lost 50 million euros this year.

On Tuesday, German magazine Focus said that Thiel has told PIN Chairman Bodo Hombach he will withdraw his offer to buy the company and will resign from his post. PIN was not immediately available for comment.

Springer shares were flat at 99.99 euros at 1223 GMT, lagging a firmer German market.

Springer, publisher of Europe’s best selling tabloid Bild, acquired a majority stake in PIN for 510 million euros (USD 741 million) earlier this year in anticipation of the liberalisation of the postal market in Germany. Deutsche Post loses its domestic mail monopoly next year.

The publisher hoped to challenge Deutsche Post by merging the PIN business with Dutch TNT’s German mail division, a person familiar with the matter told Reuters. But those plans were thwarted by the agreement on minimum pay.

On Friday the lower house of parliament voted in favour of setting the minimum wage for postal delivery workers at 9.00 euros per hour in east German states and 9.80 euros in western Germany. Springer said PIN pays 7.50 to 8.20 euros.

Unlike other European countries, Germany does not have a nationwide minimum wage. Instead, the government can set minimum wages for individual industry sectors.