Euro Companies Become Attractive as Takeover Targets (FDX, TNTEY, UPS)

FedEx Corporation (NYSE:FDX) and United Parcel Service, Inc. (NYSE:UPS) are looking over Amsterdam-based TNT EXPRESS N V (PINK:TNTEY) very intensely and as a matter of fact UPS is already in talks with the second biggest express delivery service in Europe; following #1 DHL.

Even though the poor showing of TNT Express in its recent quarter is largely to blame on an emerging market unit; the acquisition of all or parts of Euro business by U.S. firms could be symptomatic of a broader ‘entire market’ appeal of buying Euro companies as the U.S. recovery strengthens and the Eurozone still flounders under sovereign debt.

UPS already made an offer for TNTEY at $11.87 a share. The offer was rejected. But when news got around that UPS and FDX were looking over all or parts of the TNT Express business, shares of the Netherlands Company soared.
 
A UPS' spokesperson in the Netherlands said today the companies are "Negotiating."

The TNTEY Q4 report posted a loss of $229 million with its struggling Brazilian operations being the root cause of the loss. 

But this isn’t a done deal with UPS, or at least I don’t think it is. Hedge funds and private equity firms love this sort of ‘action’ and it wouldn’t surprise me to see competitive bids for all or parts of TNTEY. The good news here is for TNT Express shareholders who have, and most likely will, benefit in share valuation for any ‘partnerships’ that develop out of the current buy-out interest.

Shares of TNTEY were trading at $8.11 on Feb 16 and are currently trading in the $13.10 range; a gain of 61% in a week. 

I haven’t, don’t, and do not intend on holding any of the companies mentioned in this article.