UPS says “constructive” talks still ongoing over TNT Express offer
UPS confirmed today that “constructive” negotiations with TNT Express with regard to a possible takeover are continuing. The US parcel giant issued a statement today, complying with Dutch financial market rules requiring it to clarify its intentions within three months of making an offer.
It stated that it does intend to submit an offer for its European rival to regulators for approval.
The brief statement from the Atlanta-based company declared today: “UPS remains in constructive discussions with TNT Express regarding a potential transaction to acquire the entire issued share capital of TNT Express.
“In line with regulatory requirements, UPS express it still has the intention to submit a request for approval of its offer document to the Netherlands Authority for the Financial Markets within 12 weeks from its initial announcement of February 17.”
The February 17 announcement revealed that UPS had made a EUR 9 per share offer for TNT Express. TNT Express confirmed its board had rejected the offer, valuing the company at around EUR 5bn, but both companies said discussions would continue.
TNT Express has not publicly commented on today’s UPS announcement.
Reports
Recent media reports citing unnamed sources have suggested UPS is not looking to significant increasing its offer for TNT Express.
A number of TNT Express shareholders have been reported as being satisfied with the UPS share price offer, given the troubles TNT Express has had in the past year, but TNT board members are said to have been unhappy with the details of proposals from UPS regarding the divesture of parts of the company in order to appease European competition authorities.
TNT shares are now trading at EUR 9.27, up 0.47% today after the statement was issued by UPS. The company’s share prices shot up from around EUR 6 per share to above EUR 9 a share in December as shareholders started calling for board changes, spiking at EUR 10.24 following UPS’ initial offer.
PostNL has said in recent weeks that it is not looking to sell its 29% stake in TNT Express, though three of its board members subsequently sold more than EUR 227,000 worth of stock in the company, around half to two-thirds of their personal holdings. The Dutch postal service demerged from TNT Express last May, in a move it believed would create more value for shareholders.
Reuters has reported that both UPS and TNT Express are ruling out a counter bid from US rival FedEx at this point, and the Memphis-based company has not publicly shown interest TNT Express recently.
Analysts see UPS as looking to considerably boost its presence in Europe through the TNT Express deal – revealing its interest recently by acquiring the Benelux-based e-commerce delivery network Kiala and Italian healthcare logistics firm Pieffe Depositi.
Acquisition of TNT Express would set up UPS with a share of the European express parcels market much closer to Deutsche Post DHL’s 17.6% share. UPS currently has around a 7.7% share, but adding TNT’s 9.9% share of the market would bring the combined business to a 17.3% share.
Any offer for TNT Express from Deutsche Post DHL, meanwhile, would be seen as very difficult to achieve, in terms of keeping European antitrust authorities happy.
