Jump to content
UK NEWS WEBSITE OF THE YEAR
Log in
See all Business
Royal Mail ‘minded to accept’ £3.5bn takeover offer by Czech billionaire
Parent company IDS receives improved cash offer from Daniel Kretinsky
James Warrington
15 May 2024 • 2:24pm
Daniel Kretinsky
Royal Mail has said it is minded to accept a proposed £3.5bn takeover offer from Czech billionaire Daniel Kretinsky.
In an update to investors on Wednesday, parent company International Distribution Services (IDS) said it had received a revised possible cash offer from Mr Kretinsky’s EP Group of 370p per share.
Advertisement
The offer marks an increase of almost 16pc on EP Group’s previous rebuffed bid of 320p per share and values the company at £3.5bn.
The board of Royal Mail said it would be minded to recommend the offer to shareholders. EP Group now has until 5pm on May 29 to table a firm bid or walk away. Shares in IDS surged 20pc following the revised offer to 327p.
Under the terms of any offer, Mr Kretinsky has agreed to make contractual undertakings to the Government to protect key public interest matters.
These include maintaining Saturday deliveries for first class letters and keeping the one-price-goes-anywhere service.
The tycoon, who is known as the Czech sphinx, has also vowed to maintain employees’ current rights, protect the Royal Mail brand and keep the company headquartered in the UK.
Royal Mail said it will continue to hold discussions with EP Group over the scope and duration of these undertakings, which would be made to ministers as well as to the company.
The board is also seeking assurances that Mr Kretinsky will maintain IDS’s investment grade credit rating.
The two companies will start to carry out due diligence, though bosses warned there was no certainty that a firm offer will be made.
Keith Williams, chairman of IDS, said: “The board is minded to recommend this offer price, which it considers to be fair and reflects the value of GLS’ current growth plans and the progress being made on change at Royal Mail to adapt the business to a significant fall in the demand for letters and growth in parcels.
“It is however regrettable that despite four years of asking, the Government has not seen fit to engage in reform of the universal service and thus improve our financial position and ensure that Royal Mail could provide an economically sustainable service to the British public.
“The board believes that the proposed contractual undertakings to be offered by EP Group should ensure that IDS continues to deliver the key elements of the universal service in the UK and protect the interests of the workforce at both Royal Mail and GLS.”
EP Group’s revised offer consists of a 360p per share in cash, plus a final dividend of 2pc which is expected to be paid in September and a special dividend of 8pc which would be paid on completion of the deal.
Mr Kretinsky, who is also an investor in West Ham Football Club and Sainsbury’s, is already the largest shareholder in IDS with a stake of more than 27pc.
His swoop is likely to prove controversial given the sensitive nature of the postal service.
Sir Vince Cable, who oversaw the privatisation of Royal Mail in 2013, has called on ministers to carry out a fit and proper person test on the Czech sphinx.
Mr Kretinsky was previously subject to a national security investigation when he increased his stake in the company above 25pc in 2022, though this was ultimately approved.