TNT holds out for higher bid from UPS

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TNT holds out for higher bid from UPS

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Share in Dutch freight and delivery firm TNT Express shot up on Monday as investors indicated they would want a better buyout offer than that made by the world’s largest package delivery firm United Parcel Services.

TNT said on Friday it has rejected an offer from UPS, but that both companies were still in talks.

Some analysts believe shareholders may be hoping from a counter offer from rival FedEx.

The Dutch package delivery firm is the smallest of the four world leaders in transporting goods and documents and it issued a profit-warning last year.

That is because it faces tough price competition on its key routes, a recession in its core European market, and problems in Brazil where it has struggled to integrate Expresso Mercurio which it bought in 2007.

Analysts said UPS has long harboured an interest in TNT, which would help it expand in Europe, especially in Britain, France and Germany in addition to the Netherlands.

About two-thirds of TNT’s revenue is from European customers, but it also has been steadily growing in China, Brazil and India. UPS would also be taking out a European rival that has shown a willingness to undercut competitors on price.

TNT’s revenue has declined as the weak global economy spurred customers to seek cheaper shipping options. Some analysts said it was not big enough to compete with the world’s major delivery companies.