TNT targetting Royal Mail's parcels arm

LONDON (Reuters) - Dutch mail company TNT NV is demanding control of the Royal Mail's profitable European parcels delivery arm as part of a multi-billion pound proposal made to the government, The Sunday Telegraph newspaper said.

Last week the government rejected a proposal to turn the state-owned Royal Mail into a not-for-profit company.

The newspaper, citing people familiar with the bid, said TNT's desire to gain control of General Logistics Systems (GLS), which is headquartered in Amsterdam, was contained in an outline plan submitted to the UK government in recent weeks.

It cited insiders as saying ministers were unhappy with the valuation attached to Royal Mail in TNT's proposal and that the board of Royal Mail would not willingly surrender control of GLS.

It said TNT's proposed offer was understood to have fallen well short of the 3 billion pounds valuation that ministers are thought to be attaching to a 30 percent stake in Royal Mail.

Nobody at the Royal Mail was immediately available for comment.

(Reporting by James Davey; Editing by Greg Mahlich)