TNT un­ex­pect­edly to sell ex­press unit

The Pak Banker - - Company& -

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

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