By Albin Sybera
Czech energy and media oligarch Daniel Kretinsky looks set to buy International Distribution Services (IDS), owner of the British postal service Royal Mail, after his £5.2bn (€5.9bn) improved offer was recommended by the company.
It comes after IDS turned down an indicative £4.5bn takeover bid from Kretinsky's EP Group in April, forcing Kretinsky to improve his bid by 50p to 370p. The deal to take the group private is pending government and shareholder approvals.
“I know that owning this business will come with enormous responsibility – not just to the employees but to the citizens who rely on its services every day,” Kretinsky commented in an update for investors, highlighting that “IDS, and Royal Mail in particular, from part of the national infrastructure of the countries they operate in”.
“We will support the business in the next critical phase of its transformation and beyond, providing our experience and financial resilience to support the management team,” the billionaire noted.
Kretinsky's bid has sparked criticism in the British press over the way the “Czech Sphinx” has appeared reluctant to discuss his plans and strategies in public.
Nils Pratley in The Guardian wrote that “Kretinsky will have to talk hard numbers and cast-iron financial commitments if he intends to continue” the pursuit of Royal Mail.
Meanwhile the FT's famous Lex column commented: 'Daniel Křetínský’s reputation for mystery suggests he is difficult to understand. The Czech billionaire’s investment approach seems pretty straightforward: target very well-known, very underperforming companies.'
When commenting on the deal announcement, the Chair of IDS, Keith Williams, stated that “the IDS board has negotiated a far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards”.
The BBC website wrote that the “markets seem to think there is a chance the deal will be blocked by the current or any future government as the shares in Royal Mail’s parent company are trading at a discount to the 370p a share being offered by Kretinsky”.
Kretinsky already controls 27.5% of IDS, which also owns the Netherlands-based parcel business GLS.
In the UK, the Czech tycoon already owns stakes in supermarket chain J Sainsbury and English Premier League football club West Ham United.
The over half a millennium-old Royal Mail has been facing questions as to its future shape and operations in a world dominated by the e-commerce services of global tech giants such as Amazon. The company employs over 160,000 people and has been wracked by strikes recently.
There is speculation that Kretinsky aims to break up IDS and sell off GLS, and also that he is counting on the Royal Mail's postal delivery obligations being weakened by a future UK government.
The UK Labour Party’s shadow business secretary, Jonathan Reynolds, told the Financial Times that his party would “take the necessary steps to safeguard [Royal Mail’s] undeniable identity and place in public life”. Labour is odds-on favourite to win the British election in July.
