TNT stock bumps after acquisition bid from UPS

   Shares in the Dutch document and small package delivery company TNT Express rose sharply on Friday, after it rejected an unsolicited acquisition bid from UPS on Friday.
   Atlanta-based UPS offered 9 euros per share, TNT said, or a total of about 4.99 billion euros ($6.4 billion).
   On Monday, the stock rose by more than 50 percent, trading in a range of 9.721 euro to 9.949 euro on Monday, up from its Friday close of 6.343 euro.
   TNT said its supervisory and executive boards “carefully considered the indicative proposal and explored its rationale, merits and risks for shareholders and all other stakeholders,” before deciding to reject it.
   The boards “have informed UPS accordingly but continue to be in discussions,” TNT added.
   Kevin Sterling, an analyst who follows UPS for BB&T, said his feeling was that UPS’s initial figure may have been a low number designed to take out a competitor whose stock has been trading at a depressed price. TNT has traded in a range of 4.46 euros to 10.20 euros during the past year.
   Sterling thought it was possible UPS might make another offer for TNT, but said “they are not going to overpay.”
   And while it was possible FedEx may also make an offer for the company, he said both FedEx and UPS have “made it obvious they don’t need TNT.”
   “You’ve got a seller and only two buyers,” he said, adding it was unlikely that competition authorities in Europe would allow DHL to acquire TNT.
UPS, he said, has a good ground network in Europe as evidenced by the company’s ability to move cargo around the continent after the 2010 eruptions of Iceland’s Eyjafjallajökull which disrupted air traffic in April 2010. He noted the company has been expanding its hub in Cologne and last week acquired Kiala, a firm based in Brussels that provides delivery to consumers in Belgium, France, Luxembourg, the Netherlands and Spain that buy goods over the internet.
   Last year, TNT was divided into two companies, one which was TNT Express, and the other Post NL which focuses on mail, parcels and e-commerce in the Netherlands, in addition to Germany, Italy and the United Kingdom. In 2006, TNT sold its logistics division to Apollo Management. The business merged with Eagle Global Logistics and now operates under the name CEVA.
   UPS said that on Feb. 11, following discussions with TNT, it had “made a revised, increased and comprehensive proposal to acquire the entire issued share capital of TNT for 9 euros in cash. Discussions between the parties concerning this proposal are ongoing, although there is currently no certainty that any agreement will be reached.”
   TNT is seen as a natural acquisition target for UPS because it would strengthen its European network. A fact sheet says UPS already has 43,000 of its 324,000 employees in Europe, where it serves 60 countries and territories with 451 operating facilities.
   For the first nine months of 2011, TNT had revenue of 5.4 billion euros ($7.1 billion), an increase of 2.9 percent over the same period 2010. Sixty-three percent of its revenue came from Europe, Middle East and Africa. TNT is expected to announce its full-year 2011 earnings on Feb. 21. UPS had revenue for the full-year 2011 of $53.1 billion. — Chris Dupin