TNT unexpectedly to sell express unit
LONDON: TNT NV, Europe's second-biggest express company, unexpectedly said it will sell its expressdelivery business and continue as a postal-delivery company.
TNT gained the most in almost seven months after the Hoofddorp, Netherlands-based company announced plans to initially sell 69.1 percent of the express-delivery unit before later returning the remaining stake to investors.
"This is quite an important change of strategy," Andre Mulder, an analyst at Kepler Capital Markets, said today. "It's harder to sell the mail unit because of the strikes and influence from the government. You have a bigger chance selling the express division."
Analysts estimated earlier this year the express unit was worth about 6.25 billion euros ($8.2 billion) following market speculation United Parcel Service Inc. or FedEx Corp. may seek to buy the division. TNT, which had a monopoly on letter deliveries in the Netherlands until last year, started in April to internally separate the express division from its postal-delivery business, with the intention of divesting the latter.
TNT rose as much as 1.26 euros, or 6.7 percent, to 20.10 euros, the most since May 10, and was up 5 percent as of 9:20 a.m. in Amsterdam trading. The stock has dropped 8.2 percent this year, valuing the company at 7.4 billion euros.
TNT shareholders will first have to agree to a demerger of both businesses before the company will decide whether to sell the express unit to a third party or seek a listing for the division, according to TNT spokesman Ernst Moeksis.
Chief Executive Officer Peter Bakker will step down when the separation is complete. TNT's remaining mail unit will be run by Harry Koorstra, while MarieChristine Lombard will head the express-delivery business.
Bakker, who took his current post nine years ago, sold TNT's logistics operations in 2005 and divested the freightmanagement division a year later. Returning part of the proceeds to investors through share buyback programs, Bakker also invested in expanding the company's Express network, while restructuring the Mail division.
Increased domestic competition in the Netherlands has eroded prices while the volume of letters handled has fallen as customers increasingly use e-mail. Postal workers went on strike in November to protest against plans to cut 11,000 jobs. -Bloomberg