Exel surges on talk of bid from UPS
Shares in Exel PLC surged over 4 pct in midmorning deals on speculation the UK transport logistics company could receive a takeover bid from US postal giant UPS, dealers said. Dealers argued such a deal would be logical and noted there are rumours circulating that Deutsche Post could also be eyeing Exel. Analyst Andrew Beh at ING said Exel would be a great fit for both UPS and Deutsche Post. Beh highlighted a report he published back in Nov 2004 which noted the potential for consolidation in the support services sector, with Exel specifically mentioned as a takeover target. ING pointed out consolidation in the sector would most likely involve quoted companies that have been awarded mail licences, such as Hays DX or Business Post Group. Yet the broker added that Exel, as a specialist logistics provider, is looking increasingly isolated.
In short, ING believes the most likely tie-ups will involve Deutsche Post World Net(DPWN)/UPS/Kuehne & Nagel and Exel/Wincanton.
