Royal Mail 'minded' to accept £3.5bn takeover proposal by Czech billionaire Daniel Kretinsky

Sky News
Updated ·2-min read

The owner of Royal Mail has said it is "minded" to accept a revised takeover bid by Czech billionaire Daniel Kretinsky.

The latest offer from Mr Kretinsky's investment firm EP Group values the Royal Mail parent company International Distribution Services (IDS) at £3.5bn.

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Mr Kretinsky's firm already owns most of IDS as a 27.6% shareholder but wishes to buy the remaining shares.

An earlier offer of £3.20 a share was rejected last month for being too low.

But now he has offered £3.60 for each share. The day before the original offer was made, a share in IDS cost £2.14.

An extra shareholder payout of 8 pence per share has been offered by EP Group, if the deal closes, as has a 2 pence per share payment to every stakeholder, expected to be paid in September.

It would bring the total value of an IDS share to 73% more than it cost before the prospect of a buyout was raised.

Analysis: Many are mystified why a Czech billionaire wants to buy Royal Mail's owner

'Good value'

"Having considered the proposal, the board has indicated to EP Group that it would be minded to recommend an offer to IDS shareholders", the IDS board said.

The price is "fair" and reflects the value of current growth plans, the IDS chairman said.

Consideration was given by the board to the national significance of Royal Mail as the operator of the postal network.

"The board is particularly mindful of Royal Mail's unique heritage and responsibilities as the designated universal service provider in the United Kingdom and a key part of national infrastructure," it said.

"In assessing the proposal, the board has also been very mindful of the impact on Royal Mail and GLS and their respective stakeholders and employees, as well as broader public interest factors."

EP Group has until 29 May to advance or withdraw its takeover bid.

Who is Daniel Kretinsky?

There has already been scrutiny of Mr Kretinsky's part-ownership in the postal company but a government national security concerns review into his investment led to no intervention.

He also owns parts of West Ham Football Club and Sainsbury's.

EP Group, which he controls, has financial interests in energy, logistics, and food retail.

Political reaction

Labour has called for Royal Mail to remain domiciled in the UK, paying tax and keeping its headquarters here.

Shadow business secretary Jonathan Reynolds has written to Mr Kretinsky asking him to work closely with the Communication Workers Union to build a sustainable Royal Mail and whether he intends for the firm to remain the universal postal delivery provider.

Under the universal service obligation, letters and parcels are delivered six days per week.

Earlier this year, Royal Mail put forward plans to end second-class letter deliveries on Saturdays and to cut the service to every other weekday.

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