Royal Mail owner agrees to £3.57bn takeover by Czech billionaire

 

Royal Mail owner agrees to £3.57bn takeover by Czech billionaire

 

Cash offer from Daniel Křetínský’s EP Group still needs approval from shareholders and government

 

Jack Simpson

Wed 29 May 2024 07.36 BST

https://www.theguardian.com/business/article/2024/may/29/royal-mail-owner-agrees-to-takeover-by-czech-billionaire

 

The takeover of Royal Mail has edged closer after its owner agreed terms and conditions on a £3.57bn takeover by the Czech billionaire Daniel Křetínský.

 

In an update to the market on Wednesday, the postal service’s parent company, International Distributions Services (IDS), said it had accepted a cash offer from Křetínský’s EP Group.

 

The deal means Křetínský, who owns more than 27% of IDS stock, pays 360p a share for the struggling postal service.

 

EP had until 29 May to formally submit its £3.57bn bid, which was improved from an earlier £3.1bn offer that IDS had said “significantly undervalues” the company, or walk away from a takeover for six months.

 

The deal will also still need to be approved by IDS shareholders at the annual general meeting on 25 September and could still be scrutinised and blocked by the government under the National Security and Investment Act. Earlier this month, IDS bosses held a meeting with the business secretary, Kemi Badenoch, to discuss the bid and reforms to the universal service obligation.

 

The chancellor, Jeremy Hunt, had said that any takeover bid for IDS would face a “normal” security review but the government was not opposed to EP’s bid in principle.

 

EP is expected to present a series of undertakings to the government, including pledges not to make compulsory redundancies or split up the group, which also includes the international parcels arm GLS.

 

The chair of IDS, Keith Williams, said it had negotiated a “far-reaching package of legally binding undertakings and commitments” from EP Group as part of the deal announced on Wednesday.

 

He said: “These cover the provision of the one-price-goes-anywhere universal service obligation (including first-class letters still delivered six days a week), the financial stability and maintenance of the IDS Group including Royal Mail, the maintenance of employee benefits and pensions, and ensuring Royal Mail remains headquartered and tax resident in the UK.”

 

Křetínský said he had the utmost respect for Royal Mail’s history and traditions and understood that owning the company came with enormous responsibility for employees but also UK citizens that rely on the services every day.

 

He added: “But IDS’s market is evolving quickly, and it must accelerate its transformation and investments into modernisation to keep up with the competition.

 

“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.”