An extra €500 million, more board seats for Dutch representatives and less Belgian government influence are the key elements of bpost’s third ‘best and final’ offer designed to win PostNL’s support for a cross-border postal merger.
The Belgian postal group last night announced an improved offer for its Dutch counterpart which has twice rejected the former proposals as insufficient in terms of price and corporate governance, especially regarding safeguards for Dutch interests.
Under the new proposal, which bpost said addresses PostNL’s objections, the offer price has been increased from €2.5 billion to about €2.55 billion. The new total is €5.75 per PostNL share compared to the former €5.65 per share. The cash element has been increased by €167 million to a new level of €3.201 per PostNL share along with 0.1202 shares in bpost per PostNL share.
More importantly, bpost admitted “there is a need for additional reassurance that the values and culture of PostNL and the interests of its Dutch stakeholders will be safeguarded” in a merged company, and proposed four amendments to its original plans.
Firstly, bpost proposed adopting a provision in the articles of association of the Combination that shareholders with an equity interest above a certain threshold (for example 15%) will have a nomination right for a number of directors proportional to their equity interest, with a maximum of one-third of the directors. “This will ensure, firstly, that if the Belgian State’s equity interest falls below a certain threshold, the Belgian State’s nomination rights will be reduced accordingly, and secondly, that the Belgian State cannot nominate more than three of the ten members of the Board of the Combination.”
In addition, as long as the Belgian State has the right to nominate one or more members of the Board, a Dutch foundation will be entitled to nominate an equal number of members in order to protect the interests of Dutch stakeholders. The board of this foundation would have three members: one appointed by PostNL, one appointed by bpost, and one prominent member of the Dutch business community.
Moreover, there would be a special majority requirement of 75% for a number of decisions of the Board of the Combination that are of significant institutional or strategic importance. This would effectively give the three directors nominated by PostNL a blocking veto.
Under the fourth element, the PostNL supervisory board would be expanded to eight members for at least four years from the start of the Combination, with four bpost nominees, two PostNL nominees and two representatives of the PostNL works council. The chairman would have a casting vote.
bpost concluded that it is “convinced that PostNL’s Supervisory Board and Management Board will carefully assess bpost’s final and improved proposal on its merits. bpost looks forward to receiving PostNL’s invitation to enter into talks on a short term.”
In response, PostNL put out a brief statement confirming that it had received bpost’s “revised conditional and unsolicited final proposal”.
“The Supervisory Board and Board of Management of PostNL are reviewing and considering bpost’s revised conditional offer, acting in accordance with their fiduciary duties. In doing so, they will carefully consider the interests of all of PostNL’s stakeholders,” the company stated.
Previously, PostNL rejected bpost’s offer on the grounds that the combined company would be under the effective control of the Belgian state, while the offer price of €5.65 per PostNL share, half in cash and half in bpost shares, “does not represent a sufficiently compelling value proposition for PostNL's shareholders”. The Dutch company also underlined that its supervisory and managements boards “remain confident in the stand-alone strategy of PostNL which management is implementing and executing successfully.”
* Separately, bpost announced that it finalised the acquisition of the Belgian activities of Lagardère Travel Retail on November 30. The acquired businesses had sales of €431 million and normalized EBITDA of €14 million in 2015.
