TNT shares continued to rise yesterday following speculation on trading floors that FedEx might bepreparing a takeover bid for the European express and mail company.The Dutch group’s shares are
trading at almost 5% higher than a week ago, at EUR 34.14 mid-morning today (CET) compared to EUR32.57 at the close of Wednesday last week (27 June). TNT and FedEx have declined to comment on therumours.Market press agency AFX News reported dealers as saying a takeover offer of as high as EUR 50per share was circulating around trading room floors, which would value TNT at around EUR 21.14billion. Bloomberg quoted Andre Mulder, an analyst at Kepler Equities with a “buy” recommendationon TNT shares, as saying a TNT takeover by FedEx, or US rival UPS, “would make strategic sense forthe companies”.
TNT is currently in the middle of a EUR 400 million share buyback, its third in 18 months,widely seen as a strategy to ward off any hostile bid. The two others, each of EUR 1 billion, werecompleted in January this year and April last year.
TNT has been the subject of takeover speculation for the past two years. German financialinvestor Cornelius Geber was considering a joint bid with US investment group Blackstone in early2006, but reportedly pulled out when TNT’s share price rose some 40% making a bid too expensive.UPS, which has made several high-profile acquisitions in recent years, such as US trucking groupOvernite and freight forwarder Menlo, has made no secret of its desire to expand in theinternational parcels market. Back in 2005, it said TNT was a potential target the company waslooking into, and was generally looking to make acquisitions in the European mail sector.
FedEx has made acquisitions in China, India and the UK over the last year under itsinternational expansion strategy.
The Dutch government last year agreed to give up its golden share in the company, clearingthe way for a takeover, following a European Court of Justice ruling that it was illegal. Thegovernment also agreed to sell its 11% ordinary shareholding back to TNT for EUR 600 million,making the company entirely private.
