Airborne Mulls Selling Ground Operations
Monday, March 24th 2003, 12:00 am
News On 6
SEATTLE (AP) _ Airborne Inc. said Monday it is negotiating to sell its ground operations to DHL Worldwide Express for cash at a premium over the express mail company's current stock price.
With more than 48.4 million shares outstanding, Airborne was worth more than $800 million at Friday's closing stock price. The Wall Street Journal, which reported on the talks in Monday's edition, said the companies were close to an agreement for slightly more than $1 billion.
Airborne shares climbed $2.20, or 13.2 percent, to $18.90 in early trading Monday on the New York Stock Exchange.
In its news release Monday, Airborne said its air operations would remain wholly owned by current shareholders should a deal be reached and completed.
But it cautioned that no agreement had been reached yet and there was no assurance one would be reached. Any agreement would be subject to regulatory approval and stockholder ratification.
Airborne said it will not make further announcements about the talks until a deal is concluded or efforts to reach one are abandoned.
The announcement was issued before the market opening. Airborne stock gained 87 cents Friday to close at $16.69 a share. Its high over the past 52 weeks was $23.34.
The Journal's story on Monday said that under the terms being discussed, DHL would pay in the low $20s per share.
Airborne began offering ground service, a less expensive alternative to air shipments, on April 20, 2001, to compete with two larger rivals, Federal Express and United Parcel Service. Both are likely to strenuously oppose approval of any deal with DHL, The Journal reported.
DHL, an express delivery service, is owned by Deutsche Post of Berlin, which in turn is owned 69 percent by the German government.
Airborne Inc. is the holding company for Airborne Express, which provides shipment of letters, small packages and fright throughout the United states and more than 200 countries.
In the quarter ending Dec. 31, Airborne reported earnings of 25 cents a share on $896.8 million in revenue, compared with 5 cents a share in profit on $804.5 million in revenue a year earlier.