UPS sells TNT Airways
BrowntailWhale
I guess your rant against the EU Commission and their stance on the merger can be explained by your username!!
There has been too much consolidation in the European package market already. If the merger had gone through it would have left just UPS and DHL in a market bigger than the US and Canada; and the result would have been increased rates for users all round - not to mention hundreds, probably thousands across Europe thrown out of work.
Well done the EU for having the courage that many national governments lack.
I guess your rant against the EU Commission and their stance on the merger can be explained by your username!!
There has been too much consolidation in the European package market already. If the merger had gone through it would have left just UPS and DHL in a market bigger than the US and Canada; and the result would have been increased rates for users all round - not to mention hundreds, probably thousands across Europe thrown out of work.
Well done the EU for having the courage that many national governments lack.
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Failed UPS Delivery Leaves TNT in Lurch
HEARD ON THE STREET: Failed UPS Delivery Leaves TNT in Lurch - WSJ.com
Returned to sender. United Parcel Services UPS +1.44% has abandoned its plan to buy TNT Express TNTE.AE -41.30% for $6.8 billion, thanks to objections from the European Commission's competition authorities. The commission was demanding concessions including selling assets to build up another freight rival, making an already expensive-looking deal unviable: UPS will now pay a €200 million ($266.9 million) break fee to TNT. That is small comfort for the Dutch company, whose shares plunged 43% on Monday. Unless TNT can quickly find a convincing new strategy, there could be more falls to come.
UPS CEO Scott Davis discusses the planned merger between UPS and TNT Express in Amsterdam on March 19, 2012.
The commission's deal rejection might seem shortsighted: Europe's sluggish economy is in need of inward investment. But the regulator was worried the deal would reduce the number of major companies offering both air and ground parcel deliveries in Europe from four to three: DHL, UPS/TNT and FedEx FDX +0.68% . UPS had agreed this month to sell some assets to help build up a potential fourth rival, France's DPD. Even so, the commission remained unconvinced DPD would have the capacity to be a major competitor.
Cutting its losses after nine months of negotiation seems sensible for UPS. Its €9.50-a-share offer was already a near-50% premium to TNT's pre-deal share price: UPS shares rose 1.6% in early trading. The real problems lie with TNT. Led by interim Chief Executive Bernard Bot, the company has delayed plans to cut costs and find partners for its ailing Brazilian and Chinese businesses, pending the UPS tie-up. Its operating income fell by 26% in the first nine months of 2012. Lower prices have put pressure on its European business, where it makes two-thirds of its revenue.
An alternative bidder seems unlikely. FedEx is going through its own cost-saving program and may not want to run the commission's competition gauntlet. That leaves more potential downside for TNT. Analysts have been slow to update earnings forecasts for TNT given little company guidance: Its earnings per share could be €0.18 in 2013, compared with the current consensus at €0.32, RBC Capital Markets says. At a 14 times earnings multiple, in line with its peers, that would value TNT at around €2.50, a further 47% fall. That isn't the kind of parcel investors like to find on their doormats.
Returned to sender. United Parcel Services UPS +1.44% has abandoned its plan to buy TNT Express TNTE.AE -41.30% for $6.8 billion, thanks to objections from the European Commission's competition authorities. The commission was demanding concessions including selling assets to build up another freight rival, making an already expensive-looking deal unviable: UPS will now pay a €200 million ($266.9 million) break fee to TNT. That is small comfort for the Dutch company, whose shares plunged 43% on Monday. Unless TNT can quickly find a convincing new strategy, there could be more falls to come.
UPS CEO Scott Davis discusses the planned merger between UPS and TNT Express in Amsterdam on March 19, 2012.
The commission's deal rejection might seem shortsighted: Europe's sluggish economy is in need of inward investment. But the regulator was worried the deal would reduce the number of major companies offering both air and ground parcel deliveries in Europe from four to three: DHL, UPS/TNT and FedEx FDX +0.68% . UPS had agreed this month to sell some assets to help build up a potential fourth rival, France's DPD. Even so, the commission remained unconvinced DPD would have the capacity to be a major competitor.
Cutting its losses after nine months of negotiation seems sensible for UPS. Its €9.50-a-share offer was already a near-50% premium to TNT's pre-deal share price: UPS shares rose 1.6% in early trading. The real problems lie with TNT. Led by interim Chief Executive Bernard Bot, the company has delayed plans to cut costs and find partners for its ailing Brazilian and Chinese businesses, pending the UPS tie-up. Its operating income fell by 26% in the first nine months of 2012. Lower prices have put pressure on its European business, where it makes two-thirds of its revenue.
An alternative bidder seems unlikely. FedEx is going through its own cost-saving program and may not want to run the commission's competition gauntlet. That leaves more potential downside for TNT. Analysts have been slow to update earnings forecasts for TNT given little company guidance: Its earnings per share could be €0.18 in 2013, compared with the current consensus at €0.32, RBC Capital Markets says. At a 14 times earnings multiple, in line with its peers, that would value TNT at around €2.50, a further 47% fall. That isn't the kind of parcel investors like to find on their doormats.
Last edited by edie; 14th Jan 2013 at 16:52.
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I'm afraid it's not arrogance it's ignorance.
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Thanks EU for their right decision (at least one), it's not because that we go trough tuff times that we should be on the shopping list of major foreign companies.
Anyway UPS would had vampirised TNT with huge job losses, now TNT will be a stand alone but I am sure it will go trough as it always did.
At least this UPS/TNT novel raised some questions, now the EU pilots union informed the EC that Fedex and UPS are taking too many advantages of their traffic rights in Europe with their own aircrafts based in Europe, that will be the next issue on the EC table
Finally it would have been a shame to see TNT planes painted into poo brown colour
Anyway UPS would had vampirised TNT with huge job losses, now TNT will be a stand alone but I am sure it will go trough as it always did.
At least this UPS/TNT novel raised some questions, now the EU pilots union informed the EC that Fedex and UPS are taking too many advantages of their traffic rights in Europe with their own aircrafts based in Europe, that will be the next issue on the EC table
Finally it would have been a shame to see TNT planes painted into poo brown colour
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In my opinion TNT must grow and change its mentality, offering products to customers that never wanted because they were out of their core business. Otherwise will be very difficult for them. Last CEO Mrs. Marie-Christine Lombard did things well in long term thinking and that idea should be re-considered now. In fact, UPS wanted their business in South America and China.
Also they should update their actual air fleet. Will be phased out soon and is not very efficient. Too many AOGs and poorly managed.
Regards!
Also they should update their actual air fleet. Will be phased out soon and is not very efficient. Too many AOGs and poorly managed.
Regards!
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There's "Definitely Life After UPS for TNT"
There's "Definitely Life after UPS for TNT" - Barrons.com
Although an offer from FedEx is unlikely, some analysts see Dutch parcel-delivery outfit TNT eventually doing well on its own.
Investors in Dutch parcel-delivery company TNT Express had a tough start to the week when United Parcel Service pulled its 5.2 billion euro ($7 billion) yearlong bid for the company, causing TNT shares to plunge 41% by Monday's market close.
The good news is that it could now be an opportune time to buy TNT stock (ticker: TNTE.Netherlands). With the UPS (UPS) takeover premium gone, investors are left wondering what TNT will do next. Some fund managers and analysts say the company could do quite a lot.
Says Daniel Pasini, a portfolio manager with London-based ACPI Investment Managers: "The market in Europe will continue to be challenging, but given [TNT's] exposure to Asia Pacific and Brazil, the overall market situation, long term, is not too bad."
He views TNT stock as undervalued and expects it to trade near its pre-UPS-bid level for now. "Once operations in emerging markets start to turn around, upside should be more meaningful." he adds.
Several other analysts share Pasini's view. Some were penning upgrades even before the dust settled on UPS's surprise withdrawal, born of delays due to European regulators' antitrust concerns.
TNT CAN NOW IMPLEMENT a strategic plan it put on hold nearly a year ago when UPS made its approach. To show it can survive independently, TNT promises to refocus on its core European business. It also plans to review its operations in emerging markets, such as China and Brazil, part of an expansion plan that had upset some shareholders.
Third-quarter operating income rose in TNT's Asia-Pacific region, despite faltering demand in some countries there. Its Brazilian business remains in the red, but isn't an obvious disposal candidate. Analysts say TNT's leading 20% market share in Brazil means that earnings eventually could be strong there.
The Dutch company sold its Indian business a couple of months before UPS made its bid. But shareholders had wanted more. They had been putting TNT under pressure to make strategic changes or consider being sold months before the UPS bid.
The resumed strategy includes €150 million in cost cuts by 2013. This has led Rabobank analyst Philip Scholte to raise his rating on the stock to Buy from Hold, even though he cut his price target, from €9.50 to €6.00. The stock has been trading below €6. His rationale: "We believe this huge savings target can provide ample compensation for a weak European economy."
TNT was spun off from Dutch mail company PostNL (PNLYY) in 2011, but it suffered a series of profit warnings as loss-making emerging-markets businesses dented its European earnings.
Kepler Capital Markets analyst Andre Mulder cut his TNT price target to €6.50 from €7 following the UPS withdrawal, but he sees upside potential of 30%. He argues that there is "definitely life after UPS for TNT."
TNT's big strength is in Europe, where its operations account for around 60% of its overall sales. Despite its current troubles, the European market is growing by up to 5% a year, Mulder says. That compares with a mature U.S. market, which is static at best and could even be shrinking. He reckons that the Dutch delivery company's profit margin in Europe, before interest and taxes, could rise over time to 10% from around 6%-7% now.
The European market's allure has prompted speculation that FedEx (FDX) could step in to buy TNT, particularly as the collapsed deal means that TNT remains the smallest of the world's main express-delivery companies. However, ACPI's Pasini says FedEx is unlikely to make a bid, as it could suffer the same antitrust concerns that finished off the UPS offer. And FedEx has been growing satisfactorily in Europe without acquisitions.
PERHAPS HARDEST HIT by the failed UPS bid is PostNL, which still owns a hefty 30% of TNT. Its stock slid almost 36% on the day the UPS pullout was announced. Pasini warns that PostNL doesn't have enough cash flow from operations to cover debt coming due in 2015. "The underlying business is not attractive, as mail volumes continue to have negative growth," the analyst adds. "Over all, this stock will behave like TNT. If TNT goes up, Post should move higher with a higher beta."
On the downside, the stock overhang from the PostNL stake, which it said it now plans to "monetize"—meaning sell—over the medium term, could take some of the shine off TNT stock for now.
TNT closed at €5.46 Friday, down almost 34% on the week, while PostNL fell just over 37% in the same period to end at €1.78.
Although an offer from FedEx is unlikely, some analysts see Dutch parcel-delivery outfit TNT eventually doing well on its own.
Investors in Dutch parcel-delivery company TNT Express had a tough start to the week when United Parcel Service pulled its 5.2 billion euro ($7 billion) yearlong bid for the company, causing TNT shares to plunge 41% by Monday's market close.
The good news is that it could now be an opportune time to buy TNT stock (ticker: TNTE.Netherlands). With the UPS (UPS) takeover premium gone, investors are left wondering what TNT will do next. Some fund managers and analysts say the company could do quite a lot.
Says Daniel Pasini, a portfolio manager with London-based ACPI Investment Managers: "The market in Europe will continue to be challenging, but given [TNT's] exposure to Asia Pacific and Brazil, the overall market situation, long term, is not too bad."
He views TNT stock as undervalued and expects it to trade near its pre-UPS-bid level for now. "Once operations in emerging markets start to turn around, upside should be more meaningful." he adds.
Several other analysts share Pasini's view. Some were penning upgrades even before the dust settled on UPS's surprise withdrawal, born of delays due to European regulators' antitrust concerns.
TNT CAN NOW IMPLEMENT a strategic plan it put on hold nearly a year ago when UPS made its approach. To show it can survive independently, TNT promises to refocus on its core European business. It also plans to review its operations in emerging markets, such as China and Brazil, part of an expansion plan that had upset some shareholders.
Third-quarter operating income rose in TNT's Asia-Pacific region, despite faltering demand in some countries there. Its Brazilian business remains in the red, but isn't an obvious disposal candidate. Analysts say TNT's leading 20% market share in Brazil means that earnings eventually could be strong there.
The Dutch company sold its Indian business a couple of months before UPS made its bid. But shareholders had wanted more. They had been putting TNT under pressure to make strategic changes or consider being sold months before the UPS bid.
The resumed strategy includes €150 million in cost cuts by 2013. This has led Rabobank analyst Philip Scholte to raise his rating on the stock to Buy from Hold, even though he cut his price target, from €9.50 to €6.00. The stock has been trading below €6. His rationale: "We believe this huge savings target can provide ample compensation for a weak European economy."
TNT was spun off from Dutch mail company PostNL (PNLYY) in 2011, but it suffered a series of profit warnings as loss-making emerging-markets businesses dented its European earnings.
Kepler Capital Markets analyst Andre Mulder cut his TNT price target to €6.50 from €7 following the UPS withdrawal, but he sees upside potential of 30%. He argues that there is "definitely life after UPS for TNT."
TNT's big strength is in Europe, where its operations account for around 60% of its overall sales. Despite its current troubles, the European market is growing by up to 5% a year, Mulder says. That compares with a mature U.S. market, which is static at best and could even be shrinking. He reckons that the Dutch delivery company's profit margin in Europe, before interest and taxes, could rise over time to 10% from around 6%-7% now.
The European market's allure has prompted speculation that FedEx (FDX) could step in to buy TNT, particularly as the collapsed deal means that TNT remains the smallest of the world's main express-delivery companies. However, ACPI's Pasini says FedEx is unlikely to make a bid, as it could suffer the same antitrust concerns that finished off the UPS offer. And FedEx has been growing satisfactorily in Europe without acquisitions.
PERHAPS HARDEST HIT by the failed UPS bid is PostNL, which still owns a hefty 30% of TNT. Its stock slid almost 36% on the day the UPS pullout was announced. Pasini warns that PostNL doesn't have enough cash flow from operations to cover debt coming due in 2015. "The underlying business is not attractive, as mail volumes continue to have negative growth," the analyst adds. "Over all, this stock will behave like TNT. If TNT goes up, Post should move higher with a higher beta."
On the downside, the stock overhang from the PostNL stake, which it said it now plans to "monetize"—meaning sell—over the medium term, could take some of the shine off TNT stock for now.
TNT closed at €5.46 Friday, down almost 34% on the week, while PostNL fell just over 37% in the same period to end at €1.78.
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TNT Express reports further loss, plans disposals
Not really a surprise here...maybe they can shrink to profitability?
TNT Express reports further loss, plans disposals - Yahoo! Finance
TNT Express reports further loss, plans disposals
By Sara Webb
AMSTERDAM (Reuters) - TNT Express (TNTE.AS), whose $7 billion takeover by United Parcel Service (UPS) was blocked last month, reported a fourth-quarter loss on Monday and said it was looking to sell troubled businesses in Brazil and China.
The collapse of the UPS deal leaves the Dutch express delivery firm having to confront a weak European market on its own.
It reported a net loss for the final quarter of 2012 of 148 million euros ($197.59 million), down from a loss of 173 million euros a year ago on flat revenue of 1.86 billion euros, while analysts had on average forecast a net profit of 32.2 million euros on revenue of 1.886 billion euros.
The shares were down 1 percent after the results at 5.49 euros.
"There are many positive actions we can take to improve profitability and we look forward to providing a full update on 25 March," Bernard Bot, interim chief executive, said in a statement.
He also said the company was looking to make disposals abroad.
"Divestment opportunities for our domestic activities in Brazil and China are being secured," he said, adding that the outcome for China would be known soon.
TNT Express faces an uncertain future. It has cut capacity in Europe because of weak demand, was hit by restructuring problems in Brazil, and is seen as a minor player in China. Its chief executive quit soon after UPS made its offer in March 2012.
TNT Express was partially split from Dutch postal operator PostNL (PTNL.AS) in May 2011 in an attempt to profit from express operations as traditional mail business declines.
But its weak performance quickly prompted activist shareholders to call for a management shake-up or an outright sale, pushing TNT Express into the arms of UPS only to have EU competition regulators block the marriage.
The Dutch firm, which received a 200 million euro break-up fee from UPS this month, said on Monday it took 120 million euros in one-off charges and impairments, mainly on its domestic China and India businesses, and on the value of its freight aircraft. ($1=0.7490 euros)
TNT Express reports further loss, plans disposals - Yahoo! Finance
TNT Express reports further loss, plans disposals
By Sara Webb
AMSTERDAM (Reuters) - TNT Express (TNTE.AS), whose $7 billion takeover by United Parcel Service (UPS) was blocked last month, reported a fourth-quarter loss on Monday and said it was looking to sell troubled businesses in Brazil and China.
The collapse of the UPS deal leaves the Dutch express delivery firm having to confront a weak European market on its own.
It reported a net loss for the final quarter of 2012 of 148 million euros ($197.59 million), down from a loss of 173 million euros a year ago on flat revenue of 1.86 billion euros, while analysts had on average forecast a net profit of 32.2 million euros on revenue of 1.886 billion euros.
The shares were down 1 percent after the results at 5.49 euros.
"There are many positive actions we can take to improve profitability and we look forward to providing a full update on 25 March," Bernard Bot, interim chief executive, said in a statement.
He also said the company was looking to make disposals abroad.
"Divestment opportunities for our domestic activities in Brazil and China are being secured," he said, adding that the outcome for China would be known soon.
TNT Express faces an uncertain future. It has cut capacity in Europe because of weak demand, was hit by restructuring problems in Brazil, and is seen as a minor player in China. Its chief executive quit soon after UPS made its offer in March 2012.
TNT Express was partially split from Dutch postal operator PostNL (PTNL.AS) in May 2011 in an attempt to profit from express operations as traditional mail business declines.
But its weak performance quickly prompted activist shareholders to call for a management shake-up or an outright sale, pushing TNT Express into the arms of UPS only to have EU competition regulators block the marriage.
The Dutch firm, which received a 200 million euro break-up fee from UPS this month, said on Monday it took 120 million euros in one-off charges and impairments, mainly on its domestic China and India businesses, and on the value of its freight aircraft. ($1=0.7490 euros)
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TNT may sell aircraft, cut jobs after UPS deal failure
TNT may sell aircraft, cut jobs after UPS deal failure | AviationBrief – Your Daily Aviation Intelligence Brief
TNT is considering cutting its headcount and selling some of its long-haul fleet after the European Commission blocked its planned tie-up with United Parcel Service (UPS) .
Speaking at the release of the company’s full-year results, interim CEO Bernard Bot said TNT Express is now “looking firmly at a standalone future.” However, he added that “trading conditions remain difficult” and TNT Express now needs to press ahead with “a number of actions which were suspended because of the UPS offer.”
He added that TNT Express will detail its new strategy March 25. “We are clearly aware that further urgent improvements are required,” Bot said. “This will be more comprehensive than just cost measures. We will be looking at the company as a whole.”
Under the revamp, TNT Express will divest its domestic businesses in Brazil and China, although its international activities to these countries will continue.
Job reductions will “more than likely” also form part of the measures. “We have to restructure our operating and overhead levels. That will impact staff, but I don’t want to conjecture too much here and now when plans have not finalized,” Bot said.
TNT Express is also reassessing “structural solutions for its air capacity,” after plans to sell some of its long-haul fleet were put on hold during the UPS talks.
“We have three Boeing 777s and two 747s. One of our 747s is semi-grounded, operating one rotation per week into China. This is not a situation we are comfortable with,” Bot said. “We are looking at various alternatives to reduce the fleet. The 747s may be the first target, but we will be looking at the 747 and 777 fleet as a whole to see what we can do to reduce capacity. We don’t need that many aircraft.”
TNT Express’ two airlines TNT Airways and Spanish carrier Pan Air may also come under scrutiny during the review, according to interim CFO Jeroen Seyger. TNT Express struck a deal to sell the airlines to Air Contractors parent ASL Aviation, conditional on the UPS deal.
“This was a conditional sale related to the UPS transaction because they could not be owned by a non-European legal entity,” Seyger said. “That doesn’t mean we would exclude any option in the future, but it is not as straightforward as it was at the time when we were pursuing the merger with UPS.”
TNT Express’ adjusted full-year revenues fell by 1.7% to €7.1 billion ($ 9.5 billion) in 2012, while its adjusted operating income for the year decreased 16.4% to €188 million.
TNT is considering cutting its headcount and selling some of its long-haul fleet after the European Commission blocked its planned tie-up with United Parcel Service (UPS) .
Speaking at the release of the company’s full-year results, interim CEO Bernard Bot said TNT Express is now “looking firmly at a standalone future.” However, he added that “trading conditions remain difficult” and TNT Express now needs to press ahead with “a number of actions which were suspended because of the UPS offer.”
He added that TNT Express will detail its new strategy March 25. “We are clearly aware that further urgent improvements are required,” Bot said. “This will be more comprehensive than just cost measures. We will be looking at the company as a whole.”
Under the revamp, TNT Express will divest its domestic businesses in Brazil and China, although its international activities to these countries will continue.
Job reductions will “more than likely” also form part of the measures. “We have to restructure our operating and overhead levels. That will impact staff, but I don’t want to conjecture too much here and now when plans have not finalized,” Bot said.
TNT Express is also reassessing “structural solutions for its air capacity,” after plans to sell some of its long-haul fleet were put on hold during the UPS talks.
“We have three Boeing 777s and two 747s. One of our 747s is semi-grounded, operating one rotation per week into China. This is not a situation we are comfortable with,” Bot said. “We are looking at various alternatives to reduce the fleet. The 747s may be the first target, but we will be looking at the 747 and 777 fleet as a whole to see what we can do to reduce capacity. We don’t need that many aircraft.”
TNT Express’ two airlines TNT Airways and Spanish carrier Pan Air may also come under scrutiny during the review, according to interim CFO Jeroen Seyger. TNT Express struck a deal to sell the airlines to Air Contractors parent ASL Aviation, conditional on the UPS deal.
“This was a conditional sale related to the UPS transaction because they could not be owned by a non-European legal entity,” Seyger said. “That doesn’t mean we would exclude any option in the future, but it is not as straightforward as it was at the time when we were pursuing the merger with UPS.”
TNT Express’ adjusted full-year revenues fell by 1.7% to €7.1 billion ($ 9.5 billion) in 2012, while its adjusted operating income for the year decreased 16.4% to €188 million.
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Why are they looking for crew?
We have three Boeing 777s and two 747s. One of our 747s is semi-grounded, operating one rotation per week into China. This is not a situation we are comfortable with,” Bot said. “We are looking at various alternatives to reduce the fleet.
MD
