Photographer: Jasper Juinen/Bloomberg

Belgium’s Bpost Makes ‘Final, Improved’ Offer for PostNL

  • Belgian mail carrier raises price, makes fresh guarantees
  • PostNL of the Netherlands is reviewing the revised offer

Bpost SA of Belgium made a “final and improved” offer for Dutch mail-service rival PostNL NV in an effort to overcome objections to the takeover.

The Belgian mail carrier raised the cash component of its offer by 167 million euros ($177 million) and proposed additional amendments to the governance of the merged company to address concerns about whether the values and culture of PostNL and the interests of its Dutch stakeholders will be safeguarded, it said in a statement late yesterday.

Postal operators are responding to declining letter volume in their domestic markets with a push for productivity improvements, expanded household package-delivery services and acquisitions abroad. As growth in online commerce bolsters parcel traffic, competitors are pursuing similar strategies, including German giant Deutsche Post AG, owner of the DHL brand, which agreed in September to buy UK Mail Group Plc.

“Overall, we are looking at a small 2 percent sweetener in price, but a bigger one in terms of governance,” Andre Mulder, an Amsterdam-based analyst at Kepler Securities, said in an investor note. “This materially increases the chances of a takeover, whereas we initially thought it was ‘game over,”’ said Mulder, who has a reduce recommendation on PostNL.

PostNL shares gained as much as 5.4 percent to 4.90 euros in Amsterdam, while Bpost dropped 0.5 percent to 21.09 euros in Brussels trading.

PostNL said it is reviewing the revised offer and will carefully consider the interests of all of its stakeholders. The Hague-based company in November rejected a 2.5 billion-euro approach from Bpost, saying the proposal’s value was too low and potentially put the Dutch company under Belgian government control.

Brussels-based Bpost raised its offer price to 5.75 euros a share, valuing PostNL at about 2.55 billion euros, up from 5.65 euros a share offered last month. Bpost also proposed to limit the representation of shareholders with a stake above a certain threshold. As long as the Belgian state has the right to nominate one or more board members, a Dutch foundation will be entitled to nominate an equal number of members, Bpost said.

PostNL and Bpost will jointly announce a possible transaction only after a required Belgian royal decree has entered into effect, the Belgian company said.

“The potential merger has clear strategic merits where Bpost could recast its current suboptimal balance sheet,” Ruben Devos, a Brussels-based analyst at KBC Securities, said in a note to investors. “However, due to political meddling, it’s difficult to assess whether the renewed proposal would ultimately stand.” Devos rates Bpost accumulate.

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