Bpost sharing crashes after removing the CEO

Investors and analysts are worried about the future after Friday’s decision to oust CEO Dirk Tirez as part of an investigation into the newspaper and magazine distribution franchise. On the stock market, Bpost opened a few percentage points lower, but the stock soon fell further and fell 11 to 12%.

Tirez had only been CEO since last spring. In July he was officially appointed after leading the company on an interim basis following the removal of chief executive Jean-Paul Van Avermaet. Under Tirez, the strategy was once again clear: to expand Bpost as a service company in the parcel economy.

The stake in Bpost Bank was sold, as were the newsagents. The latter led to a political storm when it was revealed that the buyer was Golden Palace. The sale of Bpost Bank to BNP Paribas Fortis was not appreciated by the PS, the largest political party in the south of the country.

Investors are wondering how to proceed with Bpost. There are many uncertainties: who will be the new CEO? What strategy will be followed? What is the future of the contract with newspapers? The latter is the most pressing issue in the short term.

The current contract has been extended several times and originally expired in 2019. The investigation into possible irregularities in a new tender has recently been expanded with an investigation into the ongoing tender, which has already been extended. Politically, the newspaper contract sows division: the PS is in favor, the N-VA wants to get rid of it. Michael Freilich (N-VA) especially criticizes the concession.

Good or remission?

In this phase, analysts are looking above all at the cost of a possible conviction by the Competition Authority for infringements of competition. In principle, this can amount to 10 percent of turnover. Furthermore, since Bpost itself has approached the Belgian Competition Authority (BCA) and promised full cooperation, it may be able to escape a fine.

The investigation also includes Flemish newspaper publishers and newspaper distributor PPP. Mediahuis (publisher, among others The standard in The newspaper) also seems to have opted for cooperation. At DPG Media (The latest news, The morning) and PPP, there have been house searches, a sign that those subjects have not opted for collaboration with the Competition Supervisory Body.

Bpost is already working on the search for a new CEO. Since the presidency is in French-speaking hands, the CEO must be Dutch-speaking. However, it will be very difficult for Bpost to attract heavyweights. Furthermore, it is politically clear that the PS wants to strengthen its control over the company and will therefore want a CEO with whom it can maintain good relations. At the PS is party chairman Paul Magnette who closely controls the public company.