UPS Dismisses Talk of Possible Bid for Dutch Rival
A senior executive of top global logistics firm United Parcel Service on Monday dismissed talk of a $15 billion takeover bid for Dutch rival TNT as a "rumour," saying an acquisition would devalue its own shares.
The comments pushed TNT shares down by nearly 10 percent at one point on Monday after a source familiar with the talks told Reuters the U.S. company was in the early stage of discussions with Europe's number 2 mail and logistics group. TNT shares closed 0.8 percent lower on the AEX Index.
"That rumour again?" Dan Brutto, president of the company's international business, told Reuters in an interview.
"I look at that (TNT share price) and said, 'someone says we're going to buy something that devalues our shares too at the same time'," he said, adding however that acquisitions were not something he oversaw directly.
"But we always look at different things and try to fit (them) into the puzzle." He said UPS hoped to make some Chinese acquisitions.
"U.S. consumers are not buying, but I think the great opportunity for us internationally is business that never touches U.S. shores.," said Brutto, who was in Beijing to attend the 2008 Olympics where UPS is a sponsor.
Earlier on Monday, shares in Europe's number 2 mail and logistics company gained more than 6 percent after a source told Reuters on Sunday that UPS was in the early stage of discussions with TNT.
The source could provide no further detail. TNT declined to comment.
The Sunday Telegraph said UPS was planning a 10 billion euros ($15.2 billion) bid. FedEx, another suitor, ended preliminary talks to buy TNT last month, according to traders.
UPS, a bellwether of the U.S. economy along with rival FedEx Corp, last month posted in-line earnings that were hurt by rising fuel costs and a sluggish economy.
TNT's express delivery unit, which accounts for two-thirds of sales, is seen as the key attraction for its rivals because of its relative resilience in an economic downturn.
"Operationally, TNT has a very extensive and inexpensive road network, which is a key advantage versus the more air-focused networks of FedEx, UPS and to some degree also DHL," ING analyst Axel Funhoff wrote in a recent note.
TNT also has a mail operation in the Netherlands, where it enjoys a partial monopoly.
Analysts said buying TNT would boost UPS and FedEx in Europe, where both companies are estimated to have 9 and 5 percent respectively of the market versus TNT's 24 percent share.