PostNL rejects revised final proposal from bpost

The Hague

Press release
Letter to shareholders
Webcast Press Conference
Webcast Analysts’ Call
Transcript Analysts’ Call
Transcript Press Conference

  • Boards unanimously reject bpost's final proposal
  • Boards believe that combination will not be successful
  • Boards consider it likely that acquisition by bpost will trigger regulatory changes
  • Consequently, acquisition by bpost could have significant negative impact on PostNL’s resilience, its employees, its position as USO provider, its stakeholder support and its continuity, which is not acceptable to the Boards

As indicated in our press release dated 30 November 2016, the Board of Management and Supervisory Board of PostNL (the Boards), with the support of their financial and legal advisors, have carefully considered bpost’s revised and final proposal in accordance with their fiduciary responsibilities. In doing so, the Boards have taken into consideration the interests of all PostNL’s stakeholders.

The Boards have unanimously decided to reject bpost’s revised and final proposal.

PostNL has consistently compared bpost's proposals to the standalone scenario within a framework that includes key factors such as price, resilience, governance (including the influence of the Belgian state), employees and pensions, implications for the USO, stakeholder support, deal certainty and the Board’s belief whether the combination will in the end be successful.

The Boards are not convinced that a combination of the businesses of bpost and PostNL will be successful, nor are they convinced a transaction with bpost can ultimately be realised.

The Boards are of the opinion that Belgian state influence in conjunction with a complicated governance structure at various corporate levels will make the combination inefficient and not agile to respond to its challenges. The Boards further lack conviction that the necessary transformation, including the necessary innovation, can be achieved at the required pace. Lastly, a transaction with bpost lacks broader stakeholder and notably political support, which support is crucial to the success of the combination.

PostNL’s stakeholders have contributed significantly to the success of PostNL over the last years. PostNL’s employees, works council and labour unions cooperated with PostNL in successfully implementing its restructuring plans. PostNL’s pension fund and employees agreed to substantially de-risk its pension liabilities. Political support, both from the Minister of Economic Affairs, as well as from Dutch parliament, resulted in price increases that have made the USO profitable and sustainable again. And last but not least, PostNL’s long term shareholders have trusted on PostNL’s ability to deliver on its transformation process and have proven to be patient over the years as PostNL was not in a position to pay dividends.

In the coming period, there are several important government decisions due in relation to the Dutch postal market which are crucial to PostNL’s profitability going forward. This makes the general political stance towards PostNL a critical factor for the Boards to consider.

The Boards have repeatedly discussed with bpost the importance of strong stakeholder support during the unsuccessful exploration of a possible combination earlier this year. Again, in response to bpost's recent approach, the Boards have reiterated these concerns to bpost in the recent letters and also addressed this in PostNL’s press releases of 11 and 18 November 2016.

In response to bpost's approach, several of PostNL’s stakeholders have been explicit in their concerns, including in relation to the public statements of representatives of bpost and the Belgian state. These stakeholders include members of Dutch parliament, as well as members of the Dutch government - including the Prime Minister and the Minister of Economic Affairs-, as well as PostNL’s large postal customers and employee representatives. One of the principal concerns expressed by political constituents is about the 40% stake and the influence that the Belgian State would retain in a combination, essentially bringing the Dutch postal market back to the times prior to its liberalisation.

The Boards have carefully considered the outcome of the parliamentary debates held on 15 and 17 November, and 5 December 2016. In response to questions raised and motions adopted by Dutch parliament, the Dutch Minister of Economic Affairs has made it clear that the Dutch government has serious concerns about the liberalised Dutch postal market, if a company that is subject to the significant shareholding and direct influence of a foreign state would acquire PostNL. These concerns received support from a large majority of Dutch parliament. Further to these debates, the Boards consider it likely that the Minister of Economic Affairs will seek to implement changes in the Dutch regulatory framework to safeguard the liberalised postal market, upon an acquisition by bpost. The Boards consider it likely that in that case, the Minister will tender the USO or will adjust the maximum return on the USO. These measures are within the Minister's regulatory power to decide.

If these regulatory changes would be implemented, this would result in a significant deterioration of PostNL’s profitability, would jeopardise its status as USO provider, would result in the loss of a large number of jobs, would weaken PostNL’s competitive position, would result in the loss of important customers, would jeopardise PostNL’s current transition and growth in e-commerce and parcels and would leave PostNL with very little to no room to invest in growth.

For reasons set out above, the Boards believe that a combination will not be successful. In addition, an acquisition by bpost could trigger the above mentioned regulatory changes and consequently could have a significant negative impact on PostNL’s resilience, its employees, its position as USO provider, its stakeholder support and its continuity. Initiating discussions with bpost will in itself lead to substantial negative consequences for PostNL and its stakeholders, including its shareholders, which cannot be mitigated and are irreversible in nature. This would bring PostNL and all its stakeholders in a position that the Boards cannot accept. The Boards have therefore unanimously rejected bpost's final proposal.

PostNL standalone
The Boards are confident about PostNL’s standalone strategy which the company is implementing and executing successfully. The Boards consider shareholder remuneration their top priority and reiterate the expectation and commitment to resume dividend payments in 2017. In addition, PostNL intends announcing measures to improve the value proposition for its shareholders at a capital markets day around the presentation of our Q4 ’16 results.

Today, the Boards have sent a letter to PostNL’s shareholders clarifying the reasons for their decision in more detail. This letter can be found at our website.

This is a public announcement by PostNL N.V. pursuant to section 17 paragraph 1 of the European Market Abuse Regulation (596/2014). This public announcement does not constitute an offer, or any solicitation of any offer, to buy or subscribe for any securities in PostNL N.V.