Royal Mail has reached an agreement with Czech billionaire Daniel Kretínský’s EP Group for a £3.57bn takeover. The parent company of the struggling postal service, International Distributions Services, has accepted a cash offer from Křetínský’s EP Group.
This deal will see Křetínský, who currently holds over 27% of IDS, pay 360p per share for the Royal Mail. EP submitted a bid of £3.57bn improved from £3.1bn before the 29 May deadline. This was after IDS had determined the earlier offer as undervalued. However, the deal is still subject to scrutiny and potential blockage by the business secretary, Kemi Badenoch, under the National Security and Investment Act.
The government, headed by Chancellor Jeremy Hunt, will conduct a security review of EP’s bid for IDS. The administration has not expressed opposition in principle to this process. The Labour party has shown a keen interest in this deal, as it will have significant implications for the workers and the provision of an essential public service.
Mr. Kretinsky expressed his utmost respect for the history and tradition of Royal Mail. However, he also emphasized the importance of ‘modernization’ in order to stay competitive. Royal Mail’s cost-cutting plans are believed to be the only redundancy requirements imposed by the deal, without any additional ones. The company had already planned to reduce second-class post deliveries and cut 1,000 jobs as they face challenges from competing couriers and postal firms.
With an estimated net worth of $7.7 billion, Kretínský also owns a 27% stake in West Ham United Football Club.
