* UPS offer of 9 euro/share seen setting price floor
* FedEx counter-bid also seen as possible
* Biggest shareholder PostNL declines to comment
(Changes slug, adds regulatory issues, shareholder reaction)
By Sara Webb and Sophie Sassard
AMSTERDAM/LONDON, Feb 20 Investors in
Dutch freight and delivery firm TNT Express TNTE.AS are
pressing for a higher offer from U.S.-based United Parcel
Services (UPS.N), driving shares up more than 50 percent on
TNT said on Friday it had rejected an offer from UPS, the
world's largest package delivery company, of 9 euros per share
which valued the company at 4.9 billion euros ($6.45 billion),
but that both companies were still in talks. [ID:nL5E8DH455]
A source close to the talks said the shareholders wanted to
sell their stock and hoped to get between 9.5 and 10 euros per
share for a company many of them thought had been run badly but
which offers Atlanta-based UPS a bigger presence in Europe.
The Dutch package delivery firm, the smallest of the four
world leaders in sending goods and documents swiftly around the
globe, was hit by a profit-warning last year.
"TNT's supervisory and executive boards have rejected the
bid, which we see as a case of holding out to maximise the sale
price with negotiations ongoing," Neil Glynn, analyst at Credit
Suisse, said in a research note.
He added that the offer set a floor price for the stock.
TNT shares surged, trading at 9.8 euros at 0900 GMT, or up
54.5 percent from Friday's closing price of 6.343 euros.
Analysts say UPS has long harboured an interest in TNT,
which would help it expand in Europe, especially in Britain,
France and Germany in addition to the Netherlands. Others said
investors may want to tease out an offer from rival FedEx
About two-thirds of TNT's revenue is from European
customers, but it also has been steadily growing in China,
Brazil and India. UPS would also be taking out a European rival
that has shown a willingness to undercut competitors on price.
TNT's revenue has declined as the weak global economy
spurred customers to seek cheaper shipping options. Some
analysts said it was not big enough to compete with the world's
major delivery companies.
Andre Mulder, an analyst at Kepler Capital Markets, said he
did not expect major objections from competition authorities,
except perhaps in Britain.
"TNT already is the domestic market leader in Europe with an
18 percent share, with Deutsche Post second at 15 percent.
Adding the 10 percent for UPS would take it to just below 30
percent," Mulder said.
"Nearing a 33 percent danger level, we think that only in
the UK the combination may have too high a market share, so this
could be subject to some disposals."
The source close to the talks said that antitrust laws were
a potential hurdle but not a deal-breaker. But rival Deutsche
Post DHL (DPWGn.DE) said on Monday it expected regulators would
have concerns about a combined group. [ID:nWEA2583]
A collective of Dutch trade unions said in a statement on
Friday they would evaluate potential bids for TNT to ensure they
did not lead to a loss of jobs and would guarantee operations in
the Netherlands, including a headquarters in Hoofddorp, on the
outskirts of Amsterdam and close to Schiphol airport.
Dutch post firm PostNL (PTNL.AS), which is TNT's biggest
shareholder with a 29.9 percent stake, declined to comment.
PostNL shares rose 46 percent on Monday. PostNL has taken
impairments of more than 700 million euros on its stake in
recent months as shares in TNT Express dropped from a high of
10.20 euros on May 10 to a low of 4.46 euros on Oct. 6.
TNT was spliced off from PostNL last year to try to
ringfence the more attractive express delivery operations from a
traditional post business that is in decline in the age of
However TNT faces tough price competition on its key routes,
a recession in its core European market, and problems in Brazil,
where it bought Expresso Mercurio in 2007 and its delivery
partner Expresso Aracatuba in 2009, and where it has struggled
to integrate those businesses.
Its poor performance in terms of revenue, profit, and share
price has led investors, including PostNL, to call for change.
Activist shareholders want a new chief executive, a stronger
supervisory board and a turnaround in performance, whether as
part of a bigger group such as UPS or FedEx, or as an
($1 = 0.7597 euros)
(additional reporting by Roberta Cowan and Gilbert Kreijger;
editing by Elizabeth Piper)
((+31 20 504 5000))
Keywords: UPS TNT/
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