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VOL. 127 | NO. 34 | Monday, February 20, 2012

Dutch Logistics Co. TNT Rejects UPS' $6.43B Bid

SAMANTHA BOMKAMP | AP Business Writer

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NEW YORK (AP) – United Parcel Service, the world's largest package delivery company, said Friday it is still in talks to acquire TNT Express even after the Dutch package delivery company rejected a $6.43 billion bid.

UPS said there is no guarantee that they will reach middle ground and make a deal. If UPS were to successfully buy TNT, it would significantly expand its business in Europe. The deal would be UPS' biggest ever.

The bid works out to €9, or about $11.84, per share. That's based on TNT's 534.2 million outstanding shares. TNT's American depositary shares soared 56 percent to $12.57. UPS shares closed unchanged at $76.76.

TNT, Europe's second-largest express delivery company, said Friday that its supervisory and executive boards carefully considered the proposal from UPS Inc., which is based in Atlanta. Both companies confirmed they are still talking about other possible outcomes.

UPS has made a couple of smaller acquisitions to bolster its operations in Europe over the last several months. In December, it said it will buy Pieffe Group, an Italian company that specializes in shipping and storing pharmaceutical products. Last week it announced the purchase of a small Belgian e-commerce company, Kiala.

TNT, which is based in Amsterdam, has been seen as a takeover target of either UPS or smaller rival FedEx Corp. for some time. Deutsche Bank analyst Justin Yagerman said in a note to clients Friday that he doesn't expect FedEx will go after TNT, preferring instead to continue its plan of acquiring smaller companies in Europe. A FedEx spokesman said the company doesn't comment on corporate development matters.

Last month, TNT detailed plans to split its express and mail businesses and said its CEO will step down after that separation is complete. That's expected sometime next year.

The company's express operations are growing, but its mail business is struggling with lower volume and disputes over layoffs. In November, it reported third-quarter net profit fell by more than half to 5 million euros, reflecting weak margins in its European businesses and losses at its operations in high-growth emerging markets.

Shareholders are set to vote on the separation in May.

TNT was split from Dutch mail company PostNL NV in May of last year.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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