Czech billionaire Daniel Kretinsky sent a £3.5bn takeover proposal to Royal Mail owner International Distribution Services (IDS). The proposal values IDS at 360p per share, representing a 72.7% premium to the company’s share price prior to Kretinsky’s bid.
Vesa Equity, Kretinsky’s investment vehicle, currently holds a stake of about 27.6% in IDS. The board of IDS is inclined to recommend the offer price, which it deems fair and reflective of GLS’ growth plans and the ongoing changes at Royal Mail to adapt to the decline in demand for letters and rise in parcel deliveries.
However, the government has not pursued reforms. These reforms would ensure Royal Mail’s ability to provide a sustainable service to the British public. They would also enhance Royal Mail’s financial standing. The board of IDS is likely to recommend the offer to shareholders. Discussions between the two parties will continue as they move forward with due diligence.
As part of the offer, Kretinsky has agreed to certain commitments to the Government to protect key public interest matters. Some of these commitments include maintaining a six-day delivery service for first class and protecting the brand. They are also expected to keep the company headquartered in the UK.
