2nd UPDATE: TNT Shares Higher As Shareholder Revolt Gains Steam
January 09 2012 - 9:12AM
Dow Jones News
A shareholder proposal to expand the supervisory board of TNT
Express Monday drew support from another main shareholder, sending
the Dutch company's shares sharply higher amid growing frustration
over its lackluster performance and strategy.
Canadian fund manager MacKenzie Cundill, which owns about 4.5%
of TNT and around 10% of PostNL NV (PNL.AE), said it supported last
week's initiative by Jana Partners LLC which sent a letter to TNT
proposing the addition of three new three members to the
supervisory board of the logistics company, including a new
chairman.
Jana, which together with Canada's Alberta Investment Management
Corp. (Aimco) owns a stake of just over 5% in TNT, said it might
nominate those candidates to replace current members if the
proposal is denied.
"Our initial take is that this is a very positive development
for both TNT Express and PostNL," David Tiley, Vice-President
Investments at MacKenzie Cundill told Dow Jones Newswires. Mail
company PostNL retained a 29.9% stake in TNT Express after their
demerger last year.
"The proposed candidates appear ideally suited to helping
address the under performing asset base at TNT Express," Tiley
said.
U.S.-based Jana asked current TNT Chairman Antony Burgmans to
add former TNT Express Chief Executive Alan Jones to the company's
supervisory board as well as former U.S. Airways Chief Executive
and turn-around specialist David Siegel and Thomas Delbrook, the
former head of M&A at U.S. logistics giant United Parcel
Services Inc. (UPS). Jana said Jones, who improved TNT's
performance when he ran the company between 1999 and 2003, would
make a good chairman of the supervisory board.
TNT shares were up 7.1% at EUR6.48 around 1300 GMT on the
Amsterdam bourse. PostNL's stock was up 4.1% at EUR2.72.
"As a policy we never elaborate on any communication with
individual shareholders," a TNT spokesman said in an emailed
statement. In its response to Jana, Burgmans said the board would
consider the firm's suggestions.
Jana's move follows growing shareholder concern about TNT
Express' future after last year's demerger. Since the split in May
2011, the company's operational performance has deteriorated. TNT
Express' shares have fallen over 30% since. PostNL's have fallen
65%.
"We detect growing shareholder pressure for improved financial
performance or a radical change of strategy," said Roger Elliott,
analyst at Citigroup.
"We believe TNT Express is an attractive long-term asset and one
that is well placed to participate in any global consolidation but
we expect calls for prompt action on short-term issues to be
heeded," Citi's Elliot said in a research note.
Shareholders over the years have asked the company to consider
its strategic options including the possible sale of the business
after speculation surrounding takeover approaches made to TNT
Express' board. Profit warnings last year have further alienated
management from shareholders. Jana and Mackenzie have previously
called for the replacement of Chief executive Marie Christine
Lombard.
The names of Fedex Corp. and United Parcel Service Inc., TNT
Express' bigger U.S. rivals, have surfaced regularly as possible
buyers of the business. On a standalone basis, analysts value TNT
Express at up to EUR5 billion, rising to EUR7.5 billion if rival
bidders were to compete for the company.
TNT Express cut its full-year earnings guidance in early October
for the third time in 2011. It reported a 64% drop in third-quarter
net profit to EUR5 million despite an uptick in sales.
- By Robin van Daalen; Dow Jones Newswires; +31 20 571 52 01;
robin.vandaalen@dowjones.com
PostNL NV (EU:PNL)
Historical Stock Chart
From Dec 2024 to Jan 2025
PostNL NV (EU:PNL)
Historical Stock Chart
From Jan 2024 to Jan 2025