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PostNL (PNLNA NR/BBB[N]) UPS Acquisition rumours

CONSUMER STAPLES

Equities went bid this morning on the below quote from the CEO of UPS (A2/A) Benelux & France;


"There have been rumors about a sale for some time. Would UPS be interested in taking over PostNL? 'We always look at opportunities in the market and do not look at players who are only active locally, but at companies that are also active across the border. We grow through acquisitions or on our own and do not rule anything out,' says Van Veen." - De Telegraaf (translated)


  • CoC at par but would require ratings to get junked by S&P. UPS is A2/A so that benefit/option won't kick in (for 26s) but still a spread positive on UPS's 4-notch higher rating.
  • For reference UPS is $90b+ in annual sales vs. PostNL's ~$3.5b and PostNL's EV of $1.2b ($0.5b in net debt) is 1/5th of UPS cash on hand.

We'd be careful of heading in on above headlines given 1H earnings are 2.5 weeks away. We have a cheap view on IDSLN28s (under bid from PE) - PostNL 31s are spread flat to it. 26s at Z+73 are lower risk but upside limited.
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