Investors buy 5% of TNT

TNT    M&A    FEDEX    UPS

Global - Activist investors acquired more than 5% stake of TNT, re-igniting speculation of a break-up or takeover to split TNT's lucrative express division from its troubled mail unit.

New York-based Jana Partners and Canadian asset manager Alberta Investment Management Corp (AimCo) jointly purchased a combined 5.39% stake in TNT, according to a filing by the Dutch Stock Exchange regulator yesterday.

The stake, worth approximately US$580 million, is believed have been built up since last Thursday, when TNT unveiled a five year strategy to focus on express parcels and freight transport to offset shrinking mail volume, the Journal of Commerce (JOC) reported.

Activist investors believe TNT's value will be enhanced by separating its express and mail units which would ease the acquisition of an independent express business.

According to Reuters, previous speculation about either FedEx or UPS buying TNT died down during the credit crunch but signs of a market recovery could signal a return of deal talk around TNT.

Both FedEx and UPS, who are estimated to hold 9% and 2% of the European express market respectively, have consistently been seen as potential bidders for TNT, which is Europe's biggest parcel delivery

Other potential bidders are attracted by TNT's strong position in express delivery across Asia, including China, and in Latin America, reported JOC.

"Many activist shareholders believe that value can be created by splitting up TNT into mail and express because a stand-alone express business would make an acquisition of TNT much easier," said ING analyst Axel Funhoff.

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