FedEx was today widely tipped as a possible future bidder for TNT Express as media and expertsaround the world analysed the implications of the failed €5.2 billion deal with UPS.
Analysts highlighted the strategic challenges now facing TNT Express, pointed to FedEx as theonly potential realistic other buyer for the Dutch company and speculated that UPS would now seekto grow in Europe through small acquisitions instead.
All three companies were staying tight-lipped following yesterday’s announcements by UPS andTNT that the European Commission was expected to oppose the €5.2 billion deal, prompting UPS toabandon the takeover plan. UPS said yesterday it will withdraw its offer once the Commissionformally makes its decision, which is due by a February 5 deadline, and will pay TNT thetermination fee of €200 million.
Bernard Bot, TNT Express’s acting chief executive, told the Financial Times: “We are going totake the time to work on updating our strategy and come back in due course.” The company, whichwill release Q4 and 2012 results on February 18, presented a strategy entitled ‘Building onStrengths’ in February 2012, shortly after rejecting UPS’ initial offer and one month beforeagreeing to a higher offer. This strategy revolved around focusing on the core business in Europe,reducing costs and seeking partners for the loss-making businesses in Brazil and China.
Several analysts quickly speculated that FedEx might be tempted to make a move for TNT,although possibly waiting first for several months to see how the company’s fortunes fared. AnalystMaarten Bakker, of ABN Amro, told Reuters: “FedEx is the only other option. And they are not goingto be in any hurry because there is simply no rival bid.” Kevin Sterling, of BB&T, toldBloomberg: “At the end of the day, TNT needs a suitor. TNT is struggling both operationally andfinancially. FedEx is in a good position just to wait this out and let TNT come to them.” The newsagency also cited an unnamed source as saying that FedEx might consider an offer for TNT but wouldnot overpay.
On UPS’ options, Helane Becker, a New York-based analyst at Dahlman Rose & Co., toldBloomberg: “They will probably look to doing smaller tuck-in acquisitions or growing in Europe ontheir own. Not as rapidly as the TNT Express acquisition would have done, but the growth is there.”
Deutsche Post DHL quickly ruled out any theoretical move for TNT. CFO Larry Rosen toldReuters in New York: “We’re pursuing an organic growth strategy, so we are not interested inacquisitions of any kind in the express business, including TNT.”
