Royal Mail, IDS accepts £3.6bn offer from tycoon Kretinsky

International Distributions Services - the company that owns Royal Mail - has accepted a formal £3.6 billion (over €4.2 billion) takeover offer from Czech billionaire Daniel Kretinsky. The offer valued IDS, which owns Royal Mail and the international parcel network GLS, at 370 pence per share.
"The IDS board negotiated a far-reaching package," said chairman Keith Williams in a note. That includes 'a universal service obligation at the same price, the retention of employee benefits and pensions, and a guarantee that Royal Mail remains headquartered and tax resident in the UK'. The tycoon's EP group, whose main investments are in the energy sector, has pledged to continue delivering letters six days a week for at least five years.

"The scale of the commitments we offer to the company and the UK government," said Daniel Kretinsky, "reflects the seriousness with which we take this responsibility, for the benefit of IDS employees, union representatives and all other stakeholders.

Royal Mail has sought to transform itself into a company more focused on shipping and parcel delivery, parcels as letter volumes have declined dramatically over the years. Kretinsky said that private investment in Royal Mail was essential to meet the challenges of slow transformation and increasing competition.

"Any takeover bid for Royal Mail is subject to 'normal' government scrutiny, in terms of national security assessment, but is not opposed in principle," explained UK Finance Minister Jeremy Hunt

For his part, Jonathan Reynolds, the Labour Party's 'shadow' secretary in opposition, had written to Kretinsky asking for guarantees, including that Royal Mail would remain domiciled and fiscally based in the UK. A general election will also be held in the country on 4 July and the Labour Party, favourite to win, has said it will review the deal. "The Royal Mail is as British as it gets, and Labour will take the necessary steps to safeguard its undeniable identity and place in public life," Reynolds had said earlier this month.