Royal Mail owner ready to accept improved offer from Daniel Kretinsky

The board of Royal Mail's parent company, International Distributions Services (IDS), will recommend an enhanced £3.5 billion takeover bid from Daniel Kretinsky, the Czech tycoon shareholder known as the 'Czech Sphinx'.

IDS has received a non-binding offer of 370p per share from EP Group, a conglomerate controlled by Kretinsky. The offer includes 360p per share in cash and the remainder in dividends, with a special dividend of 8p per share subject to completion of the transaction. This proposal represents a 72.7% premium to IDS's share price on April 16, when EP's interest first emerged, and follows an initial 320p approach rejected by IDS due to opposition from major shareholders , including Redwheel.

Shares in IDS rose 43½p, or 16%, to close on the London Stock Exchange at 314¾p, still below EP's suggested price.

Keith Williams, chairman of IDS, indicated that the board of directors is prepared to recommend the offer to shareholders, deeming the price “fair and reflective of the value” of the growth plans at GLS, the European logistics division of the postal service. He also noted the progress Royal Mail has made in adapting to a significant drop in demand for letters and an increase in parcel deliveries.

As part of the proposal, the EP Group has agreed to offer contractual obligations to protect important public interest factors and recognize Royal Mail's role as a crucial part of the national infrastructure. These commitments, which are still being negotiated, would be presented to the government if the EP makes a strong offer. They include maintaining a “financially sustainable” universal service, continuing to deliver first-class letters six days a week, protecting workers' rights, retaining the Royal Mail brand and name, recognizing existing trade unions and maintain head office and tax residence in Great Britain.

The improved offer was made just hours before the 5pm deadline for EP to make a firm offer or withdraw, with the deadline now extended to May 29.

The takeover approach has been met with resistance from the Communication Workers Union (CWU), which represents tens of thousands of postal workers and is calling for the Labor Party to commit to renationalising Royal Mail if it comes to power. Dave Ward, general secretary of CWU, demanded that the EP must “rule out any break-up of the company or plunder of the pension surplus”, warning of a possible campaign to highlight the postal services in the upcoming general election.

Jonathan Reynolds, Labour's shadow secretary, called for “iron-cast guarantees for the future of Royal Mail” in communications with Kretinsky. These safeguards appear to be reflected in the ongoing discussions between IDS and the EP.

Reynolds said: “While it is important that Britain remains open and attractive to foreign investment, Royal Mail is an iconic British institution with a unique place in our society and infrastructure. Royal Mail is as British as it gets, and Labor will take the necessary steps to safeguard its unmistakable identity and place in public life.”

Kretinsky, who has other UK investments including stakes in J Sainsbury and West Ham United football club, has expressed his intention not to break up IDS by separating loss-making Royal Mail from GLS, in order to use the group's pension scheme surplus protection and to prevent forced redundancies. .

The move comes as Royal Mail seeks to recover from a protracted and costly industrial dispute over wages, benefits and modernization plans, with a focus on its more profitable parcel delivery business amid a declining letters market.

Amanda Fergusson, CEO of the Greeting Card Association, commented: “We will need to see these principles embedded in any commitments between the Government, IDS and EP Group before recommending this offer.”

Related Posts

  • Business
  • May 25, 2024
  • 5 views
  • 1 minute Read
Walmart is ending its credit card partnership with Capital One, but customers can still use their cards

Walmart has ended a partnership with Capital One, making the banking company the exclusive issuer of Walmart's consumer credit cards. The companies announced the change in a joint statement on…

  • Business
  • May 25, 2024
  • 4 views
  • 5 minutes Read
South Africa's four major political parties are entering the final weekend of their pre-election campaign

JOHANNESBURG — South Africa's four main political parties began the final weekend of campaigning on Saturday before a potentially crucial election that could bring the most significant change to the…

Leave a Reply

Your email address will not be published. Required fields are marked *

You Missed

Supreme Court Justice Sonia Sotomayor says she cries after some of the decisions

  • May 25, 2024
Supreme Court Justice Sonia Sotomayor says she cries after some of the decisions

European banks in Russia face 'an enormous amount of risk', says Yellen

  • May 25, 2024
European banks in Russia face 'an enormous amount of risk', says Yellen

Can blockchain improve weather forecasts? WeatherXM thinks so

  • May 25, 2024
Can blockchain improve weather forecasts?  WeatherXM thinks so

Russia's last missile cruiser in the Black Sea destroyed by Ukraine

  • May 25, 2024
Russia's last missile cruiser in the Black Sea destroyed by Ukraine

Supreme Court Justice Sonia “Wise Latina” Sotomayor Reveals She's “Crying” Over the Court's Conservative Rulings (VIDEO) | The Gateway expert

  • May 25, 2024
Supreme Court Justice Sonia “Wise Latina” Sotomayor Reveals She's “Crying” Over the Court's Conservative Rulings (VIDEO) |  The Gateway expert

Friday's pre-holiday trip breaks the record for most air travelers screened at U.S. airports

  • May 25, 2024
Friday's pre-holiday trip breaks the record for most air travelers screened at U.S. airports

Man United youth stun Man City in FA Cup: goals from Alejandro Garnacho and Kobbie Mainoo lead Red Devils

  • May 25, 2024
Man United youth stun Man City in FA Cup: goals from Alejandro Garnacho and Kobbie Mainoo lead Red Devils

Walmart is ending its credit card partnership with Capital One, but customers can still use their cards

  • May 25, 2024
Walmart is ending its credit card partnership with Capital One, but customers can still use their cards

Jack Smith continues Trump's false claims of FBI assassination plot

  • May 25, 2024
Jack Smith continues Trump's false claims of FBI assassination plot

Key West, Florida, Santorini, Greece and more locations around the world known for their sunsets

  • May 25, 2024
Key West, Florida, Santorini, Greece and more locations around the world known for their sunsets

Entrepreneurship, reality TV and creating success

  • May 25, 2024
Entrepreneurship, reality TV and creating success