TNT

ECGS  Dutch partner Shareholder Support had - unlike competing proxy advisers - recommended investors to vote in favour of the discharge of the TNT Directors, but against the planned demerger of TNT’s Mail and Express Businesses.

Express will operate as TNT Express NV and TNT Post's brand name will change to PostNL.

The reasons given by the Board for separation were the increasingly divergent strategic profiles of the two businesses and the limited synergies between them. Separation will enable greater focus, transparency and two distinct investment opportunities for shareholders. It will also facilitate participation in possible sector consolidation.

On 25 May 2011 in Amsterdam despite strong critics against the company's management, the deal was approved although with opposition notably based on Shareholder Support negative assesment of the proposed capital structure, shareholders rights and the poor impact in terms of governance.

While PostNL (current share price: EUR 5.94) has quite some problems (unhappy personnel, liberalized mail operator market-> margin pressure) and  looks to be undervalued (low price (P/E,B etc.) ratios, nice return ratios (ROE, etc)). The new company Express following the spinoff  quickly jumped to €10 and then slowly drifted down to its current price of €6.92.    

In the end, the sum of the parts as suggested by Shareholder Support seems to be inferior to the pre-demerger share price: (EUR 16.00).

 5 July 2011.