United Parcel Service Inc. is in talks with TNT Express after its Dutch rival rejected a 4.9 billion-euro ($6.45 billion) cash bid, the companies said on Friday.

UPS made an offer of nine euros per share for all of TNT's issued capital, a premium of 42 percent over TNT's closing price on Friday of 6.343 euros.

UPS confirms that, on 11 February, 2012, following discussions with TNT, it made a revised, increased and comprehensive proposal to acquire the entire issued share capital of TNT for nine euros per share in cash, the U.S. firm said in a statement.

We are open to advancing the talks, and we continue to be in discussions, Ernst Moeksis, spokesman for TNT Express, told Reuters.

UPS's bid emerged as activist shareholders in TNT stepped up calls for the company to shake up its board and increase shareholder value, which could include a takeover.

Analysts have put a price tag on TNT Express of about 5 billion euros.

The group has suffered declining revenues across all of its markets as the global economic slowdown led more customers to shun air transport in favor of cheaper shipping.

Listed in May after it split from delivery firm PostNL, TNT Express shares have fallen from a high of 10.20 euros on May 10 to a low of 4.46 euros on October 6.

I find it difficult to believe that there's going to be a significant bidding war for these assets, said Art Hatfield, managing director in equity research at Morgan Keegan & Co., based in Memphis. It's a good offer.

Andre Mulder, analyst at Kepler Capital Markets, said he did not rule out a counter-offer from FedEx Corp .

We had expected Fedex to move as its European domestic share is only 2 percent, he said in a research note, adding that FedEx has zero debt and could easily cough up this amount if it could find the banks to lend it the money. As TNT would be highly complementary, cost savings would be much smaller at some 100 million euros.

Mulder said he did not see major objections from the competition authorities except perhaps in the United Kingdom.

TNT already is the domestic market leader in Europe with an 18 percent share, with Deutsche Post second at 15 percent. Adding the 10 percent for UPS would take it to just below 30 percent. Nearing a 33 percent danger level, we think that only in the U.K. the combination may have too high a market share, so this could be subject to some disposals.

PostNL, the largest shareholder in TNT Express with 29.9 percent, declined to comment on the UPS bid. It has already indicated that it would support a possible takeover.

PostNL has taken impairments of more than 700 million euros on its stake in recent months on its TNT stake.

Bowing to pressure from activist shareholders, TNT this month agreed to appoint several new members to its supervisory board, including two candidates proposed by American investor Jana Partners.

Jana Partners called for an overhaul of the TNT Express supervisory board in December, including replacing the chairman, to try to force the Amsterdam-listed logistics company to improve operational performance while at the same time explore a sale.

Jana, which together with Canada's Alberta Investment Management Corporation (AIMCO), has a combined stake in TNT Express of just over 5 percent, told Reuters earlier this year the current TNT management was destroying shareholder value and needed to be replaced.

($1 = 0.7597 euros)

(Additional reporting by Lynn Adler; Editing by Sara Webb and Jane Merriman)

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