FedEx Corp. (FDX) to Proceed with TNT Express Merger
Shares of FedEx Corp. (FDX) were trading off -1.28 or -0.80 percent to $159.17 per share in Friday's premarket after the company announced in a joint release with Dutch company, TNT Express (TNTE) its formal Offer for the acquisition of all outstanding TNT Express shares for $8 per share. FedEx Corp. stock closed at $160.45 per share, down -4.50 or -2.73 percent in Thursday's regular trading session.
Hoofddorp, The Netherlands based TNT Express N.V. is one of the largest express delivery companies in the world, making as many as one million consigned deliveries daily. The company delivers everything from documents to palletized freight and operates ground and air transportation networks in Africa, the Asia Pacific region, Europe and the Middle East. The company had revenues of $6.7 billion or $7 billion last year.
The original offer by FedEx for TNT Express was made on April 7th, 2015, in which both companies tentatively agreed on the $4.8 billion merger. Today's publication of FedEx's Offer document formalizes the deal that will commence with an Acceptance Period beginning on August 24th at 9:00 hours Amsterdam time or 3:00 hours New York time and ends on October 30th, 2015 at 17:40 hours Amsterdam time or 11:40 hours New York time.
TNT Express will be holding an extraordinary general meeting of shareholders on October 5th, 2015 at 9:00 hours Amsterdam time to discuss the details of the offer. Both the Executive and Supervisory boards of TNT Express fully support and recommend the offer to all TNT Express shareholders for acceptance.
David Binks, Regional President Europe, FedEx Express noted in the press release that, "This is an important transaction for FedEx, and the offer represents positive news for all stakeholders. We believe the combination will provide significant value to both companies and both sets of shareholders. FedEx is delighted by the unanimous support from the Executive Board and the Supervisory Board." The acquisition of TNT Express will broaden FedEx's presence in the 61 countries where TNT has fully owned operations.
PostNL N.V., which currently holds about 14.7 percent of TNT Express shares has irrevocably pledged to tender its shares under the FedEx Offer. The Offer is subject to a minimum of 95 percent of TNT shares, which could be lowered to 80 percent if shareholders at the extraordinary general meeting vote in favor of inter alia Asset sale and Liquidation.
The Offer is still conditional on obtaining competition approval from the antitrust authorities in the European Union, China, Brazil and to a certain extent, the United States. The offer is expected to close by the first half of 2016. FedEx stock has been under considerable pressure since making its 52-week high of $185.19 in mid June. Despite declining over 15 percent from its yearly high, the stock is still up over 6 percent over the 52-week period.
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