By Albin Sybera
Czech energy and media tycoon Daniel Kretinsky has had his £4.5bn takeover bid for Royal Mail rejected by the owner of the British postal service, International Distributions Services (IDS).
IDS shares jumped by 29% on April 17 after it announced it had turned down an indicative offer at 320p per share from Kretinsky’s EP Group, the Financial Times reported.
IDS stated that “the timing of the proposal is opportunistic” and that it “significantly undervalues IDS and its future prospects”.
Through his investment company VESA Equity Investment, Kretinsky already controls 27.5% of IDS, which consists of British Mail and the Netherlands-based parcel business GLS.
Kretinsky and his long-term business partner, Patrik Tkac, hold stakes in significant assets in both the UK and the Netherlands, including football side West Ham, supermarket chain J Sainsbury, and Dutch PostNL.
EP Group is advised by JPMorgan Chase, Citigroup, and BNP Paribas, FT noted, quoting sources close to the situation. The company has until May 15 to submit a firm offer under UK rules that govern takeover bids for public companies.
“Kretinsky will have to talk hard numbers and cast-iron financial commitments if he intends to continue a pursuit that would require a thumbs up from the government,” Nils Pratley commented in the Guardian on the turned down offer, noting Kretinsky’s contradictory statements, which appeared to rule out a bid for Royal Mail a year ago.
Pratley also noted that EP Group’s offer did not provide a hint of the future course of Royal Mail investments, including crucial questions the national parcel services face, such as whether the loss-making Royal Mail would be kept together with profitable GLS.
“As it happens, Kretinsky addressed the split idea a year ago – he argued it didn’t make sense – but, as we’ve seen, his thinking can move on,” Pratley wrote.
Boosted by the energy crisis, Kretinsky and Tkac have been on a seemingly endless shopping spree across Europe in the past two years, but their companies faced some disappointments in recent months.
This February, French IT company Atos ended talks with Kretinsky’s EPEI over a purchase of Atos unit Tech Foundations, which was already announced last August as completed. FT reported that Atos’ new management sought to re-negotiate the terms, while several minority shareholders and some French legislators criticised the selling of the strategic company to a foreign investor.
Kretinsky’s EPH energy infrastructure unit, EPEI, recently reported a 15% y/y drop in profits in 2023 as a result of deceased flow of Russian gas to Europe.
On the other side, Czech media have reported that EPH is looking forward to CZK44bn (€1.74bn) in payments from the German government for scaling down its coal activities in Germany. EPH is also poised to receive similar payments from the Slovak government.
