TNT shareholders discuss FedEx offer at today’s EGM
TNT has provided a trading update for the third quarter of 2015 ahead of its Extraordinary General Meeting of Shareholders (EGM) today (5 October), during which the recommended public offer by FedEx to acquire TNT will be discussed. In the update statement, TNT said that its management team remains focused on executing its Outlook transformation strategy, which was presented at the company’s Capital Markets Day on 18 February.
TNT said that it had made progress during the third quarter in implementing Outlook and “continued to achieve underlying revenue growth”.
The statement added: “Customer satisfaction increased further, fuelled by service improvements and new services. However, the economic volatility in Brazil, China and Australia weighed on TNT’s performance in these parts of the world.
“In its Domestics segment, TNT faced competitive pressures in Australia, compounded by the drop in commodity markets, and the ongoing costs of modernising the company’s Australian infrastructure.
“The Domestics segment’s performance was also affected by substantially lower margins in TNT’s French operations. TNT is on track to investing about €300 million in its transport and IT infrastructure in 2015, in line with guidance. The main infrastructure investments will be completed by the end of 2016.
“Investments in productivity enhancement and automation have not yet contributed to the bottom line, as it takes time for such investments to deliver cost benefits.”
TNT said that “in view of these factors as well as Outlook-related transition costs” it anticipates that third quarter adjusted operating income will be “materially lower” than in the same period of last year.
The statement concluded: “As stated in February, 2015 is a challenging year of transition for TNT. TNT expects to achieve year on year improvements from 2016 onwards and to realise the full benefits of Outlook from 2018-2019. TNT will elaborate on its third quarter performance on 26 October 2015.”
UPDATE
TNT issued a subsequent statement at 11:30 UK time, advising that the EGM had been held and the Executive Board and Supervisory Board of TNT Express had restated their support and recommendation for FedEx’s offer.
FedEx has also now issued a statement acknowledging that “the shareholders of TNT Express approved all of the resolutions on the agenda”.
The FedEx statement then quoted David Binks, Regional President Europe, FedEx Express, as saying: “We appreciate that the shareholders of TNT Express approved the resolutions of TNT Express’ Extraordinary General Meeting.
“We believe the combination of these two great companies will provide significant value to the employees, customers and shareowners of both TNT Express and FedEx, and we continue to work constructively with the regulatory authorities around the world to obtain clearance of the acquisition.”
