TNT to take big stake in demerged Express unit

LOGISTICS firm TNT said yesterday that it will keep a 29.9 per cent stake in its Express unit once it is spun off from its Mail division in a bid to avoid raising funds, cheering investors who had feared a cash call.

The move, details of which were announced in a capital markets day presentation in London, means the firm is reduced to its former incarnation as a postal business.

It also makes the Express operations a more attractive takeover target for the likes of FedEx and UPS.

A full split of operations would have resulted in an equity shortfall of around $1.19bn (£763m), while TNT could face an additional shortfall of around €900m against equity in 2012 or 2013 due to accounting changes, TNT said.

TNT has a market capitalisation of €7bn, or $9bn, against $70bn for UPS and FedEx’s $28bn. TNT Express could be worth a little less than €10bn to a rival, while mail was worth between €3bn and €4bn, depending whether it remained public or was bought by a private equity firm, ING analyst Axel Funhoff said.