TNT hits highest in six months after UPS bid report
TNT NV rose to the highest in almost six months in Amsterdam on a report that United Parcel Service Inc. may bid for the Dutch company as soon as this weekend.
Hoofddorp, Netherlands-based TNT gained 1.70 euros, or 6.9 percent, to 26.45 euros, the highest since Feb. 28. That values the company at 9.7 billion euros (USD 14.4 billion).
UPS and TNT may meet to work out a deal over the weekend, with the U.S. company offering 34 euros to 38 euros a share, U.K. newspaper the Times reported, without citing anyone. TNT surged 26 percent on July 14, its biggest jump since first selling shares to the public in 1998, after the Financial Times reported that FedEx Corp., the second-biggest U.S. package- shipping company, was in talks to buy its Dutch rival.
“If UPS started calculating and put together a team when FedEx rumors emerged in July, they should be ready to make a bid by now,” said Thijs Berkelder, an analyst at Petercam in Amsterdam, in a telephone interview. He said TNT may be worth about 40 euros a share in a takeover bid.
TNT declined to comment on “rumors and speculation,” spokesman Cyrille Gibot said today by telephone.
“UPS will never comment on rumors or speculation about mergers and acquisitions,” said Norman Black, a spokesman for the Atlanta-based company.
UPS in Europe
UPS controls about 10 percent of the European express market, according to Amsterdam-based Landsbanki Kepler analyst Andre Mulder. Buying TNT would add about 16 percent, he said in an Aug. 11 interview.
The time is right for a takeover offer, Berkelder said, as an economic slowdown and increasing fuel costs drive down the stock prices of mail and express-delivery companies. Berkelder, with a “hold” recommendation on TNT shares, said he’s betting UPS will team up with CVC Capital Partners Ltd., which would buy TNT’s postal unit.
CVC, a London-based buyout firm, bought 22 percent of Post Danmark in 2005 for 1.27 billion kroner ($250 million). Post Danmark and CVC in 2005 bought almost half of Belgium’s postal service for 300 million euros, following market deregulation that began in 2003.
TNT has kept its Dutch monopoly this year for handling mail items weighing 50 grams (1.8 ounces) or less. The Dutch Cabinet decided in May against allowing full competition for letter deliveries by July 1, a date that had been considered for deregulation, after Germany protected its own market by introducing a minimum wage for letter carriers.
