Czech Billionaire Kretinsky’s £3.5bn Takeover Bid for Royal Mail Under Consideration

Royal Mail Owner Considers Revised Takeover Bid by Czech Billionaire

The owner of Royal Mail, International Distribution Services (IDS), has announced that it is considering a revised takeover bid from Czech billionaire Daniel Kretinsky. The new offer from Kretinsky’s investment firm EP Group values IDS at £3.5bn.

Kretinsky’s firm is already the majority shareholder of IDS, holding a 27.6% stake. However, the billionaire is looking to acquire the remaining shares with his latest offer of £3.60 per share. This is an increase from his previous offer of £3.20 per share, which was rejected by IDS last month for being too low.

According to the IDS board, the revised offer is considered to be “fair” and reflects the value of the company’s current growth plans. In addition, EP Group has also offered an extra shareholder payout of 8 pence per share and a 2 pence per share payment to all stakeholders, expected to be paid in September. This brings the total value of an IDS share to 73% more than its value before the possibility of a buyout was raised.

In a statement, the IDS board said, “Having considered the proposal, the board has indicated to EP Group that it would be minded to recommend an offer to IDS shareholders.” The board also took into consideration the national significance of Royal Mail as the operator of the postal network. They noted that the company has a unique heritage and plays a key role in the national infrastructure as the designated universal service provider in the United Kingdom.

The board also acknowledged the potential impact on Royal Mail and its employees, as well as broader public interest factors, in assessing the proposal. EP Group has until 29 May to either advance or withdraw its takeover bid.

Kretinsky is no stranger to high-profile investments, as he also owns parts of West Ham Football Club and Sainsbury’s. Through EP Group, he has financial interests in energy, logistics, and food retail.

In response to the potential takeover, the Labour party has called for Royal Mail to remain domiciled in the UK and to continue paying taxes and keeping its headquarters in the country. Shadow business secretary Jonathan Reynolds has written to Kretinsky, urging him to work closely with the Communication Workers Union to build a sustainable Royal Mail. He also inquired about Kretinsky’s plans for the company to remain the universal postal delivery provider, as mandated by the universal service obligation.

Under this obligation, Royal Mail is required to deliver letters and parcels six days per week. However, the company has previously proposed ending second-class letter deliveries on Saturdays and reducing the service to every other weekday.

The government has conducted a national security concerns review into Kretinsky’s investment in Royal Mail, but no intervention was made.

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