AMSTERDAM Dutch mail firm PostNL NV (PTNL.AS) said it raised the value of its stake in TNT Express (TNTE.AS), the delivery firm which U.S. peer United Parcel Service (UPS.N) has offered to buy, reflecting gains in the share price.
PostNL owns nearly a third of TNT Express, which underperformed for much of last year, prompting activist shareholders to agitate for a shakeup and pushing up the share price towards the end of 2011.
UPS made a 4.9 billion euro ($6.60 billion) takeover offer for TNT earlier this month, which the Dutch firm turned down, but the two parties are still talking, pushing the stock to trade above the 9 euro per share offer.
PostNL said in a statement on Monday that its stake in TNT Express was valued at 936 million euros at the end of 2011.
"The share price of TNT Express increased during the last quarter of 2011, leading to a partial reversal of 98 million euro of the previous impairment," PostNL said as it announced fourth-quarter earnings.
PostNL said last year it had taken impairments of more than 700 million euros on its TNT stake as its shares more than halved in value from May, when TNT was spun off from PostNL, to early October.
TNT's share price has surged more than 60 percent since the end of 2011, raising the market value of PostNL's stake to about 1.5 billion euros.
Chief Executive Harry Koorstra declined to comment on continuing talks with UPS, which offered 4.9 billion euros in cash on February 17, or whether any other buyer such as FedEx (FDX.N) had approached with a rival offer. He previously indicated a buyout could be supported by the PostNL board.
Two other substantial investors in TNT Express, U.S.-based Jana Partners and Canadian group Alberta Investment Management Corporation (AIMCO), which had pushed for a turnaround in its performance, both reduced their stakes last week after TNT shares rallied nearly 40 percent in response to the UPS offer.
Jana Partners cut its stake in the Dutch delivery company to 4.49 percent from 7.15 percent, while AIMCO cut its stake to 4.59 percent from 7.52 percent, according to a filing with the Dutch financial market regulator AFM.
TNT was spliced off from PostNL last year to try to ringfence the more attractive express delivery operations from a traditional post business that is in decline in the age of electronic mail.
Koorstra said underlying profit in 2012 will continue to suffer from declining volumes in its core mail business and higher costs for pensions, taxes and restructuring.
Cash operating income is expected to fall by as much as half from 220 million euros to between 110 and 160 million.
PostNL reported fourth-quarter underlying cash operating income of 99 million euros, down 26 percent from a year ago, as Dutch mail volumes fell 7 percent. The drop was somewhat compensated for by gains in the smaller international and parcel businesses.
($1 = 0.7428 euros)
(Reporting by Anthony Deutsch; Editing by Jon Loades-Carter)