TNT will split into separate listed mail and express businesses next June and CEO Peter Bakkerwill leave the company once the demerger has been completed, it was announced today.
Presenting detailed plans to split up the group into its two core businesses, executivesstressed that separate mail and express companies would be better positioned to face their ‘strategic challenges’ as standalone businesses. The demerger, expected in June 2011, will come 15years after the Dutch postal operator acquired TNT Express Worldwide.
Bakker said the plans, presented at the annual investor day in London, gave the financialmarkets ‘a clear path’. They enabled an immediate listing of the two companies, avoided having toraise new capital and enabled shareholders to vote on the proposal, the company stated. The Expressshare would be ‘a growth stock’ while the Mail share would be ‘a value stock’ paying out regulardividends, and investors could decide which business to invest in, he commented at a pressconference.
Under the complex demerger, internal separation of the two businesses will be completed inJanuary 2011. Once the 2010 group financial accounts have been published, new accounts will bedrawn up for separate mail and express companies. TNT NV shareholders will then vote on thedemerger proposal in late May 2011 and the demerger, assuming it is approved, can take place withina few days of the vote, Bakker explained.
TNT NV, the current group holding company, will remain in existence as the Mail company and willbe re-named at the time of the de-merger. The Dutch parcels business TPP will stay with the mailcompany, and managers are already working on a new brand to be used from May 2011 onwards, Bakkersaid. The Mail company will also retain a stake of 29.9% in TNT Express, valued at €900 million, inorder to avoid having a €900 million negative equity for the standalone mail business.
TNT Express will be listed as a separate company and will keep the ‘TNT’ brand, Bakkerexplained. Current TNT NV shareholders will receive the same number of TNT Express shares as theirholding in TNT NV, and there will be no separate share placement on the financial markets since nonew capital needed to be raised.
The future Mail share price would be calculated to reflect the value of the Mail business and30% of Express, while the Express share price would cover 70% of the value of the Express business,CFO Bernard Bot explained.
The mail company’s future 29.9% stake in TNT Express would be a necessary financial investmentthat would be scaled down over time. There were no special voting rights and the stake would not beused “to block a potential offer for Express”, Bot said. “In the event of an unsolicited publicoffer for Express, Mail will tender if and when the majority of the shareholders supports suchoffer,” TNT said in its announcement.
Bakker told journalists that he would decide on his personal future and “life after TNT” overthe coming months.
Earlier, TNT had released a detailed statement outlining the main demerger proposals. The futureTNT Express company would be led by Marie-Christine Lombard as CEO and Bernard Bot as CFO. It wouldbroaden its business into market segments such as high-end standard parcels and freight, offer morevalue-added services, and build up day/time-definite domestic express services in emerging markets.Express’ target is to generate an EBIT of €900 – 1,000 million by 2015.
The Mail company, headed by CEO Harry Koorstra, would continue its restructuring and expand inareas with core competencies. In the Netherlands, ongoing constructive dialogue aims to achieve agood resolution with the unions. In the rest of Europe, activities will be concentrated in Germany,the UK and Italy. Growth will be realised through Mail’s highly successful Parcels unit and theInternational activities, TNT stated.
Mail’s target in 2015 is stable Cash EBIT (including cash pension contributions andrestructuring cash flows) of €300 – 370 million. Expected peaks in the restructuring costsfrom the Master plans will lead to temporarily lower cash performance in the next coming years.
