TNT NV, Europe's second-biggest express-delivery service, rose to a 51/2-month high in Amsterdam trading after a UK newspaper reported that United Parcel Service Inc (UPS) held initial talks to buy the company for 10 billion euros (S$21.12 billion).
Earlier rumour: TNT, which gained 6.5 per cent early yesterday, soared 26 per cent on July14 following a report that FedEx Corp was in preliminary talks with the Hoofddorp, Netherlands-based firm
TNT gained as much as 6.5 per cent.
UPS made an informal approach to buy Hoofddorp, Netherlands-based TNT and the companies have held preliminary discussions, the Sunday Telegraph said, citing unidentified people.
Buying TNT would give Atlanta-based UPS, the world's largest package-delivery company, a full European air and road-delivery network. TNT has said it aims to transport as much as possible by road rather than air, helping to hold back costs as prices for diesel fuel rise more slowly than for jet kerosene.
UPS and TNT 'could be a good fit. I think there are a lot of synergies between the two companies', said Axel Funhoff, an analyst at ING Wholesale Banking who recommends buying TNT shares. He said a takeover price of 10 billion euros would be 'absolutely insufficient'.
TNT rose as much as 1.64 euros to 27 euros, the highest since Feb 27. The stock was up 5.1 per cent as of 9.46am in Amsterdam, valuing the company at 9.8 billion euros.
Soaring fuel costs have hurt global courier businesses and falling share prices have made consolidation more compelling, the London-based Sunday Telegraph said.
TNT's express network in Europe is probably the most efficient of all existing networks in the region, Mr Funhoff said. UPS's presence across Europe isn't 'huge'.
TNT soared 26 per cent on July 14 following a Financial Times report that FedEx Corp, the second- largest US package-shipping company, was in preliminary talks with TNT.
The stock tumbled 16 per cent on July 24 after The Wall Street Journal said Memphis, Tennessee- based FedEx won't make an offer.
'UPS has more overlap with TNT, which makes it a bit more difficult,' Mr Funhoff said. 'On the other hand, there are more chances for cost savings. UPS is really capable to buy TNT just like that, while FedEx probably isn't. FedEx may need to seek new capital to buy TNT.'
UPS is being advised by Morgan Stanley and may plan to sell TNT's postal division to a private-equity buyer, or team up with a buyout firm for the acquisition, the Sunday Telegraph said.
TNT is being advised by Goldman Sachs Group Inc, the newspaper said.
'It's our policy not to comment on market rumours,' said Pieter Schaffels, a TNT spokesman, when contacted by Bloomberg News. UPS 'never discusses rumours or speculation about mergers and acquisitions', spokesman Norman Black said on Sunday.
UPS has considered buying TNT in the past, the Journal said at the time of the FedEx bid speculation. TNT and FedEx declined to comment on the reports of any discussions.
'The only thing I find unrealistic is that UPS would be willing to pay only 10 billion euros for all of TNT,' Mr Funhoff said. 'They probably have something like 27 euros in mind. No shareholder would accept it.'
The analyst said the price for TNT should be close to 35 euros a share.
UPS agreed in May to take over Deutsche Post AG's US air shipments to help cut costs and restore profitability at the Bonn- based company's DHL Express unit.
UPS estimated the 10-year deal with Deutsche Post, Europe's biggest mail carrier, would boost annual revenue by as much as US$1 billion.
TNT, the Netherlands' biggest letter-delivery service, said on July 28 that second-quarter net income dropped 16 per cent to 205 million euros, short of analyst estimates. The Dutch company has experienced slowing growth in deliveries of air express packages as customers moved to cheaper road-based options, amid soaring fuel prices.
TNT said last month 2008 sales and margins will be at the low end of forecasts. Revenue rose 4.5 per cent to 2.81 billion euros in the quarter. TNT's revenue in 2007 totalled 11 billion euros.
Earlier rumour: TNT, which gained 6.5 per cent early yesterday, soared 26 per cent on July14 following a report that FedEx Corp was in preliminary talks with the Hoofddorp, Netherlands-based firm
TNT gained as much as 6.5 per cent.
UPS made an informal approach to buy Hoofddorp, Netherlands-based TNT and the companies have held preliminary discussions, the Sunday Telegraph said, citing unidentified people.
Buying TNT would give Atlanta-based UPS, the world's largest package-delivery company, a full European air and road-delivery network. TNT has said it aims to transport as much as possible by road rather than air, helping to hold back costs as prices for diesel fuel rise more slowly than for jet kerosene.
UPS and TNT 'could be a good fit. I think there are a lot of synergies between the two companies', said Axel Funhoff, an analyst at ING Wholesale Banking who recommends buying TNT shares. He said a takeover price of 10 billion euros would be 'absolutely insufficient'.
TNT rose as much as 1.64 euros to 27 euros, the highest since Feb 27. The stock was up 5.1 per cent as of 9.46am in Amsterdam, valuing the company at 9.8 billion euros.
Soaring fuel costs have hurt global courier businesses and falling share prices have made consolidation more compelling, the London-based Sunday Telegraph said.
TNT's express network in Europe is probably the most efficient of all existing networks in the region, Mr Funhoff said. UPS's presence across Europe isn't 'huge'.
TNT soared 26 per cent on July 14 following a Financial Times report that FedEx Corp, the second- largest US package-shipping company, was in preliminary talks with TNT.
The stock tumbled 16 per cent on July 24 after The Wall Street Journal said Memphis, Tennessee- based FedEx won't make an offer.
'UPS has more overlap with TNT, which makes it a bit more difficult,' Mr Funhoff said. 'On the other hand, there are more chances for cost savings. UPS is really capable to buy TNT just like that, while FedEx probably isn't. FedEx may need to seek new capital to buy TNT.'
UPS is being advised by Morgan Stanley and may plan to sell TNT's postal division to a private-equity buyer, or team up with a buyout firm for the acquisition, the Sunday Telegraph said.
TNT is being advised by Goldman Sachs Group Inc, the newspaper said.
'It's our policy not to comment on market rumours,' said Pieter Schaffels, a TNT spokesman, when contacted by Bloomberg News. UPS 'never discusses rumours or speculation about mergers and acquisitions', spokesman Norman Black said on Sunday.
UPS has considered buying TNT in the past, the Journal said at the time of the FedEx bid speculation. TNT and FedEx declined to comment on the reports of any discussions.
'The only thing I find unrealistic is that UPS would be willing to pay only 10 billion euros for all of TNT,' Mr Funhoff said. 'They probably have something like 27 euros in mind. No shareholder would accept it.'
The analyst said the price for TNT should be close to 35 euros a share.
UPS agreed in May to take over Deutsche Post AG's US air shipments to help cut costs and restore profitability at the Bonn- based company's DHL Express unit.
UPS estimated the 10-year deal with Deutsche Post, Europe's biggest mail carrier, would boost annual revenue by as much as US$1 billion.
TNT, the Netherlands' biggest letter-delivery service, said on July 28 that second-quarter net income dropped 16 per cent to 205 million euros, short of analyst estimates. The Dutch company has experienced slowing growth in deliveries of air express packages as customers moved to cheaper road-based options, amid soaring fuel prices.
TNT said last month 2008 sales and margins will be at the low end of forecasts. Revenue rose 4.5 per cent to 2.81 billion euros in the quarter. TNT's revenue in 2007 totalled 11 billion euros.