TNT

TNT

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101018 TNT - A Dutch Door? 101018 TNT - A Dutch Door?

In recent weeks, the TNT share price has been under pressure, reflecting that the market has begun to price in the risk of a share issue in order to secure a BBB+ rating for both Mail and Express. But by doing so, the market appears to be overlooking alternative scenarios, including one that could involve one or more strategic buyers. Some of the hurdles TNT is facing on a stand-alone basis, may no longer be an issue in a different setting. Hence, the discounts the market has priced in may provide an excellent opportunity for potentially interested buyers to play a risk arbitrage game. By teaming up, candidates for acquiring parts of the company will be able to benefit most from this, whilst also minimising the risk of rival bids. Fiction of a potential reality? We leave this up to you to decide.

091222 TNT - all in a week's work 091222 TNT - all in a week's work

This week could be a very important week for TNT, with a next round in CLA talks and a court case that might reshape the competitive landscape in the Dutch addressed mail market.

091102 TNT - Big bang in tariffs following liberalisation 091102 TNT - Big bang in tariffs following liberalisation

Big bang in tariffs following liberalisation.

100105 TNT - challengers win court ruling 100105 TNT - challengers win court ruling

Last week TNT’s competitors won a court case. The ruling will have its effect on the Dutch mail market and could result in a more prolonged labour costs gap between TNT and its competitors and an accelerating shift in market shares.

100319 TNT - Dirk van den Broek out shopping too? 100319 TNT - Dirk van den Broek out shopping too?

A brief update on unaddressed mail. In addition to the Kruidvat contract, Interlanden may be facing a second challenge since another large client is reported to be shopping for a new delivery contract. This contract represents between.2.5% and 3% of Interlanden’s sales and involves another high profile name. TNT on the other hand appears to be in the winning mood. Not only has it recouped the AKN contract but underlying volumes decline could be less than initially expected because a recovery in advertising spending and the ‘bonus’ of an additional election in June.

101216 TNT - Draft agreement with the unions 101216 TNT - Draft agreement with the unions

A new draft agreement has been reached on TNT’s MP III restructurings. TNT has been forced to make some concessions. As a result, MP III savings may not reach the EUR 200m structurally, which TNT has guided for earlier. More important though, is that the backbone of the new delivery model has remained intact and that yet another uncertainty may be out of the way soon.

100129 TNT - Draft labour deal in the Netherlands 100129 TNT - Draft labour deal in the Netherlands

The good news is that TNT and the unions have reached a draft agreement on a new two years’ CLA for most of its employees of Mail Netherlands.The good news is also that TNT can now finally start an important last leg of its Master Plans II costs savings. The bad news is that these costs savings may be more back-end loaded that we had hoped initially, whereas pressure on sales and margins (resulting from the fierce competition in Dutch addressed mail) will be more fron-end loaded. Mail will be a drag on overall results in our view, which may trigger more shareholders to call for a break-up of the company.

100521 TNT - Ex Post: an Ex Ante for Express? 100521 TNT - Ex Post: an Ex Ante for Express?

TNT's shares are currently trading at a more than 10% discount to their fair value on a going concern basis. This seems to reflect that investors have accepted the fact that an IPO or sale of Mail cannot take place until early next year at the earliest. However, Mail and Express will have been separated as of this summer, allowing any potential acquirer to go cherry-picking. We do not believe that the current uncertainties on the financial markets will pose a major hurdle for a take out of Express before next year. Unlike financial buyers, strategic/industry buyers are mostly triggered by opportunities rather than by cheap access to financing. An opportunity to catch a big fish like e.g., TNT Express does not occur a lot. This scenario is not priced into the shares' current valuation.

100311 TNT - Kruidvat contract spicing up the mail sector 100311 TNT - Kruidvat contract spicing up the mail sector

A couple of weeks ago, Deutsche Post's Dutch addressed mail unit SelektMail faced a major setback by losing its AKN contract. Interlanden, its unaddressed unit, is also under a lot of pressure. Reason for this are the contract renewal talks with AS Watson's Dutch drugstore chain Kruidvat. This contract currently accounts for approx. 15% of its annual revenue. The outcome of these negotiations may affect other parts of the Dutch mail market too.

080611 TNT - liberalisation Dutch mail market as per January 2009 seems a fact 080611 TNT - liberalisation Dutch mail market as per January 2009 seems a fact

Liberalisation Dutch mail market as per January 2009 seems a fact.

101102 TNT - Master Plan III under fire? 101102 TNT - Master Plan III under fire?

The unions have issued an ultimatum to TNT with regard to the indented redundancies. According to TNT, this is very much a discussion on the number of forced redundancies and the phasing of the program over time. When looking at the latest union letter, we get the impression that the new delivery model itself is under fire. For TNT it will be very hard to make concessions without undermining core elements of this new model and its expected savings. It also raises yet another hurdle that needs to be cleared before TNT can initiate any ‘capital market transactions’ following its break-up.

100216 TNT - on the brink of a turnaround in mail tariffs? 100216 TNT - on the brink of a turnaround in mail tariffs?

The termination of the AKN contract at SelektMail shows that low tariffs alone cannot secure mail business. For SelektMail, it is time to revisit is strategy in the Netherland. Whether it is ‘up’ or ‘out’, the likelihood of the Dutch mail market turning into a dupopoly has come a major step closer.This would mean an end to the price war and a return to more economically sensible tariffs.

100903 TNT - OPTA issues to linger on 100903 TNT - OPTA issues to linger on

OPTA has decided to appeal to a higher court following a recent ruling allowing TNT to disclose less detailed data on the costs of its USO activities. This is a slight setback for TNT because this issue was one of the hurdles TNT felt needed to be cleared before an equity transaction (a part of the break-up) can be carried out. The scenario we described in our May 21st study on TNT as our dream scenario, is still possible though. We therefore see no reasons to revise our positive stance towards this stock.

100126 TNT - update on EMN, Dutch CLA and labour costs issues 100126 TNT - update on EMN, Dutch CLA and labour costs issues

Last week, TNT released a number of statements containing measures that are part of its newly presented strategy withregard to EMS. This week will be an important week for TNT for it may bring more clarity on labour costs in theNetherlands and Germany.

091111 TNT - update on liberalisation Dutch mail market 091111 TNT - update on liberalisation Dutch mail market

Update on liberalisation Dutch mail market.

100621 TNT -CVC again interested in buying stake in Mail? 100621 TNT -CVC again interested in buying stake in Mail?

According to an article in last Saturday’s edition of Het Financieele Dagblad, CVC is in talks with TNT on acquiring a‘substantial’ stake in its Mail business. Although it is not clear whether the rumours on CVC are true, it clearly illustrates what we have emphasised all along: one will probably not have to wait until early next year before M&A activity will turn into reality. Although we would have preferred to see this starting with Express, rumours like these provide an important trigger for the share price going forward.

110112 TNT - The only way (for tariffs) is up! 110112 TNT - The only way (for tariffs) is up!

The only way (for tariffs) is up!

110119 TNT - Another duopoly is born 110119 TNT - Another duopoly is born

Another duopoly is born.

110520 PostNL - Ace in the Hole 110520 PostNL - Ace in the Hole

PostNL - Ace in the Hole

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