May 30, 2016 / 2:31 PM / 4 years ago

UPDATE 1-Failed postal merger causes political spat in Belgium

* Former minister accused of upsetting secret talks

* Analysts not convinced by business rationale (Adds Bpost CEO comments)

By Robert-Jan Bartunek and Toby Sterling

BRUSSELS/AMSTERDAM, May 30 (Reuters) - Belgium’s minister in charge of public companies accused his predecessor on Monday of scuppering postal operator Bpost’s plans to acquire Dutch peer PostNL.

The two companies said on Sunday they had discussed a possible friendly takeover by Bpost but had failed to agree on terms, without specifying the sticking points.

Analysts believe the price was likely to have been a key stumbling block, but Alexander De Croo, a deputy prime minister in charge of the telecoms and post, blamed his predecessor.

Former minister Jean-Pascal Labille, of the opposition French-speaking Socialist party, disturbed secret negotiations between the two groups by announcing the government was seeking to sell its majority stake, De Croo said.

“I’ll give you a scoop,” Labille told radio station La Premiere on Friday. “Shortly, the mail services will lose their public character. The state will sell its stake.”

Labille’s comments caused trading of Bpost shares to be suspended and forced the company to make a statement on its plans.

“The information was wrong. The state has no intention at all to sell its stake, quite to the contrary. His only intention was to cause a strike,” De Croo told radio station Radio 1 on Monday.

Labille said he stood by his comments.

Belgian Finance Minister Johan Van Overtveldt said the regulator would investigate whether Labille had illegally divulged insider information.

In an interview with Dutch daily Het Financieele Dagblad, Bpost CEO Koen Van Gerven said PostNL’s supervisory board rejected the deal over the weekend after concluding remaining obstacles were too difficult to resolve in a reasonable time.

“We worked together well with the managing board, but that was apparently not sufficient,” it quoted Van Gerven as saying.

He stopped short of blaming Labille outright, but said his comments “definitely did not help” and described them as “irresponsible and misplaced.”

Dutch newspaper De Telegraaf cited an unnamed person closely involved with the negotiations as saying that the companies’ management boards had agreed on a price of 5.10 euro per share, or 2.26 billion euros ($2.52 billion) in cash and shares for PostNL as early as April.

Van Gerven was to lead the combined company and PostNL CEO Herna Verhagen would leave.

However, the companies were mired in discussions over Dutch pension obligations and strategy questions, and it was uncertain whether major PostNL shareholders would support the deal at that price.

Shares in PostNL surged as much as 9 percent on Monday on the news, but fell back to trade up 3.7 percent at 1422 GMT. BPost shares were down 2.7 percent.

Bpost has a market capitalisation of 4.9 billion euros, nearly three times that of PostNL, according to Thomson Reuters data.

Analysts were not convinced about the business rationale of a combination of the two companies, saying that while both companies face shrinking mail deliveries there were not many synergies to counter this trend.

“We believe that Bpost’s attempt may have been a rather opportunistic one to also take advantage of PostNL’s extremely low valuation at the moment,” ABN Amro analysts wrote in a note to clients. ($1 = 0.8977 euros)

Editing by Philip Blenkinsop and Adrian Croft

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