DealZone

UPS and FedEx eyeing powder keg in TNT

Fresh from jolting stock markets with a rosy earnings forecast, FedEx, along with its transport nemesis UPS, are seen stalking Europe for a lucrative target to take on Deutsche Post’s DHL. Specifically, they are being talked about – again – as potential bidders for the express unit of Dutch mail and logistics company TNT.

TNT moved a step closer to being broken up as activist funds took a 5 percent stake. New York-based Jana Partners and Canadian asset manager Alberta Investment Management Corp (AimCo) jointly hold the stake. The duo’s move is seen adding to investor pressure to split TNT’s lucrative express division from its troubled mail unit.

“Many activist shareholders believe that value can be created by splitting up TNT into mail and express because a stand-alone
express business would make an acquisition of TNT much easier,” said ING analyst Axel Funhoff.

There has been speculation for years about either FedEx or UPS buying TNT, but much of the talk went away with the credit crunch. Is the return of deal talk around TNT another sign of recovery?

Waste Management’s sweetened trash bid

waste.jpg[Editor's note: This blog post originally referenced a Reuters article reporting that United Parcel Service had dismissed talk of a $15 billion takeover bid for Dutch rival TNT. That article is wrong and has been withdrawn. Reuters accepts that the UPS executive was not commenting specifically on reports that TNT and UPS were in talks.]

Waste Management Inc, the largest U.S. trash hauler, said on Monday it has raised its rejected bid for rival Republic Services Inc by nearly 10 percent, to $6.73 billion. Under the revised offer, Waste Management would acquire all outstanding shares of Republic for $37.00 each, a 32.6 percent premium to Republic’s share price prior to Waste’s first takeover bid. That’s not likely to bring a smile to the face of Bill Gates, a major Republic shareholder through his investment arm, BGI, who last month asked Waste Management to walk away. BGI didn’t mince words in its letter to Waste Management’s CEO and board: “We can only assume your ill-timed and poorly conceived pursuit of Republic is designed to disrupt what you perceive as a competitive threat to your position in the market.”

GATX Corp is offering more than $3 billion for General Electric Co‘s rail car leasing business, a source familiar with the discussions said. GATX is the leading bidder for the unit and negotiations are ongoing, the person said. A GE spokesman declined to comment. GATX was not immediately reachable for comment.