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Dutch shipper TNT rejects UPS takeover bid

by Lou Whiteman  |  Published February 17, 2012 at 2:56 PM
UPS_227x128.jpgDutch shipping company TNT Express NV on Friday, Feb. 17, said it had rejected a €4.89 billion ($6.4 billion) buyout offer from United Parcel Service Inc. but that talks between the two companies were continuing.

Atlanta-based UPS confirmed in a separate statement that it had offered €9 per share for TNT, a premium of more than 45% over the target's Thursday close in Amsterdam. UPS called that offer "a revised, increased and comprehensive proposal," and said that though talks continue, "there is no certainty" any agreement will be reached.

Hoofdorp-based TNT has been a rumored target for UPS or FedEx Corp. since well before the company's May 2011 spinout from what is now PostNL NV, the Dutch postal operator. PostNL still retains about 30% of the Express business, and could be hoping to lure FedEx into a bidding war for the company.

A deal would be the largest ever for UPS, trumping its $1.25 billion purchase of Overnite Corp. in 2005.

UPS and TNT reportedly held talks back in 2008 but were unable to reach an agreement. The U.S. company in the years since has done a series of small deals in Europe, including an announcement this month that it had purchased Brussels-based Kiala for an undisclosed sum. But a deal for TNT, which generated operating income of €180 million on sales of €7.053 billion in 2010, would overnight give either UPS or FedEx much-needed scale in Europe while eliminating a major competitor.

TNT officials, in comments made to reporters in Europe, called the UPS offer conditional on the buyer performing diligence and subject to financing.

But the company could feel ample pressure to strike a deal. The UPS bid comes just weeks after hedge fund Jana Partners LLC, working with Canada's Alberta Investment Management Corp., pledged to nominate a slate of directors to TNT Express' board. The funds, which own a combined 5% of the company, cited "continued poor operating performance and deterioration of value" that they say "threatens TNT Express and all of its stakeholders."

PostNL, which has recorded impairments of more than €700 million as shares of TNT fell from a May high of €10.20 to a recent €6.34, is also said to be open to a sale, according to reports out of Europe.

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Tags: auction | M&A | TNT Express NV | United Parcel Service Inc

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