PostNL rejects revised final proposal from bpost

The Boards of PostNL have unanimously rejected bpost’s final proposal. In a statement sent to Post&Parcel this morning (7 December), PostNL said that its Boards “believe that combination will not be successful” and “consider it likely that acquisition by bpost will trigger regulatory changes

“Consequently,” added PostNL, “acquisition by bpost could have significant negative impact on PostNL’s resilience, its employees, its position as USO provider, its stakeholder support and its continuity, which is not acceptable to the Boards.”

The PostNL statement continued: “PostNL has consistently compared bpost’s proposals to the standalone scenario within a framework that includes key factors such as price, resilience, governance (including the influence of the Belgian state), employees and pensions, implications for the USO, stakeholder support, deal certainty and the Board’s belief whether the combination will in the end be successful.

“The Boards are not convinced that a combination of the businesses of bpost and PostNL will be successful, nor are they convinced a transaction with bpost can ultimately be realised.

“The Boards are of the opinion that Belgian state influence in conjunction with a complicated governance structure at various corporate levels will make the combination inefficient and not agile to respond to its challenges. The Boards further lack conviction that the necessary transformation, including the necessary innovation, can be achieved at the required pace. Lastly, a transaction with bpost lacks broader stakeholder and notably political support, which support is crucial to the success of the combination.

“PostNL’s stakeholders have contributed significantly to the success of PostNL over the last years. PostNL’s employees, works council and labour unions cooperated with PostNL in successfully implementing its restructuring plans. PostNL’s pension fund and employees agreed to substantially de-risk its pension liabilities. Political support, both from the Minister of Economic Affairs, as well as from Dutch parliament, resulted in price increases that have made the USO profitable and sustainable again. And last but not least, PostNL’s long term shareholders have trusted on PostNL’s ability to deliver on its transformation process and have proven to be patient over the years as PostNL was not in a position to pay dividends.

“In the coming period, there are several important government decisions due in relation to the Dutch postal market which are crucial to PostNL’s profitability going forward. This makes the general political stance towards PostNL a critical factor for the Boards to consider.”

UPDATE AT 17:00 GMT ON 7 DECEMBER

bpost has announced that, following PostNL’s rejection of its final proposal, it has “decided not to further pursue a Combination between the two companies”.

However, the Belgian postal operator did add: “We continue to believe that this combination would present a compelling industrial rationale and constitute an opportunity to accelerate bpost’s and PostNL’s growth strategy, thereby creating substantial value for all their stakeholders.”