TNT CEO to leave after break-up of firm

Postal and express group TNT said long-serving chief executive Peter Bakker will leave after he completes the break-up of the company amid signals the express delivery operations could be sold.

Bakker, chairman and CEO since 2001, has overseen several strategic shifts at the company, including navigating a turbulent period leading to European postal market liberalisation and the impact of digitisation on its traditional mail operations, but most recently he has been criticised by observers for being slow to separate the mail and express operations to generate better value, reported Dow Jones Newswires.

The decision to separate the express and mail services, reached earlier this year, came after sustained pressure from investors, who had argued that more value could be gained by breaking up the company rather than building a European mail network ahead of the full market liberalization scheduled for 2011.

Bakker, 49 years old, who had long resisted shareholders, finally said in August that the case for keeping the two businesses together was weakening because of the failed mail market opening, which has led to declining volumes at the mail unit due in part to the surge in electronic mail.

Ahead of its investor day in London Thursday, which was intended to update investors on the details of the split, TNT said it wouldn't issue new shares or raise more capital to finance the demerger of its express business, which will leave it with the mail, or postal, activities.

TNT will retain a stake of 29.9% in the express unit to cover separation requirements, but that will be returned to shareholders as soon as possible, the company said.

Both units will be publicly listed after the separation, Bakker confirmed, but Chief Financial Officer Bernard Bot told Dow Jones Newswires Thursday that separating the express unit makes a sale of the express unit much easier, should TNT receive a good offer.

"TNT finally provided some clarity on the upcoming split, which is positive," said ING analyst Axel Funhoff. "This is very positive indeed, particularly that TNT doesn't need to raise more capital, which was a concern for investors."

The Dutch company's express business competes with the likes of Deutsche Post and United Parcel Services (UPS) and FedEx Corp of the US. It employs about 160,000 workers and serves more than 200 countries. In 2009, it reported operating income of US$849.84 million on revenue of $13.74 billion.

The demerger will be completed by January 1, 2011, which will be followed by a proposal to formally split being put to a general meeting of shareholders planned for May 2011. That will include appointments to the new executive and supervisory boards.

"The proposal realises all stakeholder objectives in a low-risk and efficient demerger transaction and provides shareholders the opportunity to invest in two sector leaders," Bakker said. "The value of the 29.9 percent financial minority stake of express retained by mail, required to realise the demerger, will be returned to shareholders as soon as possible, up to the level allowed by mail's targeted credit rating."

Once TNT is split, Bakker will leave the company to pursue other opportunities. Asked about his future plans, Bakker, who often enters press conferences to light shows and U2 music playing, said, "I'll be busy until the separation, and in the meantime I'll figure out life after TNT."
(Source:www.cargonewsasia.com)