Dutch mail firm PostNL in spotlight over TNT

AMSTERDAM Fri Feb 24, 2012 7:39am EST

AMSTERDAM (Reuters) - When Dutch mail firm PostNL NV (PTNL.AS) reports results on Monday it will be its comments on a multi-billion euro bid situation that are most likely to grab investors' attention.

PostNL is the biggest single investor in freight and delivery firm TNT Express NV (TNTE.AS), subject of a 9 euros per share approach from United Parcel Service Inc (UPS.N).

TNT on February 17 rejected UPS's offer, worth a total of 4.9 billion euros ($6.5 billion), but the two are still in takeover talks and some investors are hoping UPS will sweeten its offer.

PostNL, which owns 29.9 percent of TNT, has good reason to welcome a suitor. After it hived off TNT in May last year, TNT shares fell from a high of 10.2 euros to as low as 4.46 euros, forcing PostNL to write down the value of its stake by more than 700 million euros ($932 million).

The six-month lock-up period that prevented PostNL from selling its TNT stake ended in December and the Dutch postal group had already made clear it would sell the stake when "advantageous and appropriate.

So when activist shareholders including U.S.-based Jana Partners and Canada's Alberta Investment Management Corp (AIMCO)started agitating for TNT to shake up its management, appoint new supervisory board members, improve its performance and consider a possible sale, PostNL also stood to gain.

Its stock jumped on news of the talks with UPS and has surged more than 40 percent from a February 17 close of 3.31 euros.

A sale of TNT or turnaround in its performance is all the more critical because of the tough environment PostNL faces.

According to the average forecast of analysts in a poll commissioned by Reuters, PostNL is expected to report fourth-quarter underlying earnings before interest and tax (EBIT) of 130 million euros, down 29.3 percent from a year before, driven by a sharp decline in profit from domestic mail service.

PostNL, the former state monopoly, is the main provider of postal services in the Netherlands, where it faces intense price competition and where traditional mail services are in decline as more people and companies switch to email.

It has already warned it would pay its dividends in shares, not cash, from 2012 and would struggle to pay out in cash for a few years because of shortfalls in its pension funds and the declining value of its stake in TNT. [ID:nL6E7M708A]

($1 = 0.7511 euros)

(Reporting by Sara Webb)

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