TNT Express has rejected a takeover bid from UPS of 9 euros per share valuing the company at almost 5.4bn euros (£4.5bn), though it said talks would continue.
There has been speculation that TNT could be a bid target from either UPS or FedEx since it was demerged from the Dutch post office in May last year. It’s the smallest of the big four global express operators making it the last major acquisition opportunity.
Shortly after the demerger last year FedEx ruled out a bid, saying that TNT was too expensive.
The UPS bid of 9 euros per share was some 40 per cent higher than the 6.4 euros that shares had been trading at before news of the bid was released. Since then the share price has risen as high as 9.9 euros.
This in turn has led to speculation that TNT’s management is holding out for a higher price.
Not only, is TNT the smallest of the big four, since the demerger it has also struggled with problems in its businesses in South America and Asia.
It results for the first nine months of 2011, show sales in the Americas were down 9.2 per cent at 344m euros and its operating loss had grown from 36m euros to 227m euros.
Asia Pacific also showed an operating loss. As a result, despite a small increase in European profits, the company produced a shareholder loss of 97m euros.
The losses in the Americas result from acquisitions and mergers in Brazil. In January 2007 TNT bought Mercúrio, the market leader in the domestic Brazilian market. And in 2009 it added Expresso Araçatuba Transportes e Logística to its portfolio.
However, difficulties in merging the businesses led to business losses. In its report for the 1st quarter of 2011, TNT reported that Brazil suffered from “unexpected and recent volume losses and performance pressure”. A non-cash impairment of 120 million euros was included in the Q1 results.
“A new, experienced leadership team is in place since March and taking immediate action to ensure full control, customer stabilisation and service quality. The business has been set deadline for realising a turnaround by no later than the second half of 2012.”
TNT releases its 4th quarter results tomorrow.