TNT rejects UPS $6.4 Billion bid
02-17-2012, 09:09 AM
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TNT rejects UPS $6.4 Billion bid
TNT Express Board Rejects Unsolicited $6.4 Billion UPS Bid as Talks Go On - Bloomberg
United Parcel Service Inc. (UPS) made an unsolicited $6.43 billion bid to buy TNT Express NV (TNTE), Europe’s second-largest package-delivery company, and the two sides remain in talks after the offer was turned down.
The supervisory and executive boards at TNT rejected the offer of 9 euros a share, which was 42 percent more than today’s closing price in Amsterdam, according to a statement from the Hoofddorp, Netherlands-based company. Atlanta-based UPS confirmed that discussions were continuing.
“There’s pressure on TNT now to not let this go,” said David Campbell, an analyst at Thompson Davis & Co. in Richmond, Virginia. “It’s not going to stop. TNT needs to sweeten it before UPS walks away.”
A bid for TNT by UPS or FedEx Corp. (FDX) has been the subject of speculation for years as the U.S. companies study expansion in Europe. TNT was spun off from Dutch postal operator TNT NV in May, and the former parent, now named PostNL NV, (PNL) retains 29.9 percent of the express business, according to data compiled by Bloomberg.
TNT rose 2.6 percent to 6.34 euros at the close in Amsterdam. UPS reversed an earlier gain, falling 1.4 percent to $75.71 at 12:57 p.m. in New York. FedEx, the operator of the world’s largest cargo airline and No. 2 in package deliveries behind UPS, slid 1.7 percent to $93.40.
Valuation Comparison
The offer valued TNT at 1.04 times total assets, compared with a median multiple of 0.58 in 33 acquisitions of transportation services companies in Western Europe in the past 10 years, Bloomberg analysis shows. The 42 percent premium compares with an average of 15 percent in more than 270 deals in the same period.
“There were quite a few conditions with this offer, including the financing structure, due diligence and timing,” said Ernst Moeksis, a TNT spokesman in Hoofddorp. He called it “highly conditional” while adding, “We are still in discussions with UPS.”
UPS said in a statement that “following discussions with TNT, it made a revised, increased and comprehensive proposal” to buy the Dutch company. “Discussions between the parties concerning this proposal are ongoing,” UPS said.
TNT’s announcement “certainly opens the question up of ‘Will there be other bidders?’” said Stephen Furlong, a Dublin- based Davy Holdings analyst who has a “neutral” rating on the stock. “You are playing for a business which is the leader in the 20 billion-euro business-to-business express market.”
FedEx Response
United Parcel Service Inc. (UPS) made an unsolicited $6.43 billion bid to buy TNT Express NV (TNTE), Europe’s second-largest package-delivery company, and the two sides remain in talks after the offer was turned down.
The supervisory and executive boards at TNT rejected the offer of 9 euros a share, which was 42 percent more than today’s closing price in Amsterdam, according to a statement from the Hoofddorp, Netherlands-based company. Atlanta-based UPS confirmed that discussions were continuing.
“There’s pressure on TNT now to not let this go,” said David Campbell, an analyst at Thompson Davis & Co. in Richmond, Virginia. “It’s not going to stop. TNT needs to sweeten it before UPS walks away.”
A bid for TNT by UPS or FedEx Corp. (FDX) has been the subject of speculation for years as the U.S. companies study expansion in Europe. TNT was spun off from Dutch postal operator TNT NV in May, and the former parent, now named PostNL NV, (PNL) retains 29.9 percent of the express business, according to data compiled by Bloomberg.
TNT rose 2.6 percent to 6.34 euros at the close in Amsterdam. UPS reversed an earlier gain, falling 1.4 percent to $75.71 at 12:57 p.m. in New York. FedEx, the operator of the world’s largest cargo airline and No. 2 in package deliveries behind UPS, slid 1.7 percent to $93.40.
Valuation Comparison
The offer valued TNT at 1.04 times total assets, compared with a median multiple of 0.58 in 33 acquisitions of transportation services companies in Western Europe in the past 10 years, Bloomberg analysis shows. The 42 percent premium compares with an average of 15 percent in more than 270 deals in the same period.
“There were quite a few conditions with this offer, including the financing structure, due diligence and timing,” said Ernst Moeksis, a TNT spokesman in Hoofddorp. He called it “highly conditional” while adding, “We are still in discussions with UPS.”
UPS said in a statement that “following discussions with TNT, it made a revised, increased and comprehensive proposal” to buy the Dutch company. “Discussions between the parties concerning this proposal are ongoing,” UPS said.
TNT’s announcement “certainly opens the question up of ‘Will there be other bidders?’” said Stephen Furlong, a Dublin- based Davy Holdings analyst who has a “neutral” rating on the stock. “You are playing for a business which is the leader in the 20 billion-euro business-to-business express market.”
FedEx Response
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