TNT shareholders hoping for bigger offer from rival

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 ($6.45bn), but that both companies were still in talks.

A source close to the talks said shareholders wanted to sell their stock and hoped to get between 9.5 and 10 euros per share for a company which offers Atlanta-based UPS a bigger presence in Europe.

Some TNT investors had called for a management change because of poor revenue, profits and share price performance.

“Everyone is expecting a higher bid,” SNS fund manager Corne van Zeijl said, adding that rival FedEx may enter the fray. He said he expected UPS would win the prize.

“FedEx can possibly come with an offer. Ten euros per share is possible. Because FedEx is smaller they can finance it less easily.”

Van Zeijl said he was holding out for as much as 11 euros per share.

Dutch post firm PostNL, which is TNT’s biggest shareholder with a 29.9 per cent stake and holds the key to any talks with a buyer, declined to comment.

Analysts say UPS has long harboured an interest in TNT, which would help it expand in Europe, especially in Britain, France, Germany and the Netherlands, as well as in fast-growing Asian markets. “The first time UPS looked at TNT was about 15 years ago. At that time, TNT was ‘a must have’. Now it is ‘nice to have’,” said a sector banker familiar with the US firm’s thinking.

“Still TNT remains a ‘once in a decade opportunity’ for a player like UPS.”

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.

However, the Dutch package delivery firm, the smallest of the four world leaders in sending goods and documents swiftly around the globe, faces tough price competition on its key routes, a recession in its core European market, and problems in Brazil, where it has struggled to integrate acquisitions.

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.