Two hedge funds have bought more than 5% in TNT, driving speculation that they might try to force abreak-up of the Dutch express and mail group. But the fund managers say they want to work with the
company “to consolidate the fragmented European courier market”.The two funds, Jana Partners and Alberta Investment Management Corp (Aimco), have acquiredshares amounting to slightly more than 5% of the company’s capital and voting shares, the Dutchfinancial markets regulator AFM announced yesterday.
The news prompted a surge of more than 6% in the TNT share price during trading, as investorsspeculated that the hedge funds might try to force through a separation of the Dutch group into itstwo core businesses of mail and express deliveries. The share closed up 2.85% at €20.91 yesterday.
Jana last year pressed for strategy changes at US firm CNET Networks, which was later sold toCBS for $1.8 billion, and was part of an attack on Time Warner in 2005, international mediareported. Analyst Axel Funhoff, of ING Bank, was cited as saying that “many activist shareholdersbelieve that value can be created by splitting up TNT into mail and express because a standaloneexpress business would make an acquisition of TNT much easier”. Another analyst said FedEx or UPSwould be “natural buyers”.
But the tone changed somewhat today. Aimco CEO Leo de Bever told international media that hehad a record of “pragmatically working with management to solve key issues that hinder growth”. Henoted that “the current European courier market is very fragmented” and declared: “We hope to workwith TNT to consolidate the market and help grow the overall organisation”.
CEO Peter Bakker told Dutch newspaper Financieel Dagblad that he had not yet heard from thenew shareholders and reiterated that a break-up of the company did not make sense. Speaking at lastweek’s presentation of the new ‘Vision 2015’ strategy, Bakker had told analysts that such aseparation “would not address the challenges and opportunities” facing the company.
Under its new five-year strategy, TNT will downscale its European postal activities, seek torestructure the Dutch mail business and aim to grow its express business in the parcels and freightmarkets by cashing in on its extensive road networks in Europe and various emerging markets.
