Czech billionaire Daniel Kretinsky is buying Britain's Royal Mail for $4.6 billion


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A vehicle outside the Royal Mail collection office in London on May 16, 2024.


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The owner of Royal Mail has accepted a 3.57 billion pound ($4.6 billion) takeover bid from Czech billionaire Daniel Kretinsky, clearing the way for the sale of one of Britain's oldest and most prestigious institutions to a foreign owner for the first time.

International Distribution Services, which owns the loss-making Postal Service, said on Wednesday that it had accepted payment of 3.70 pounds per share ($4.69). Takeover offer from Kretinsky's EP Group.

The deal will affect thousands of workers and has raised concerns about the future of a vital part of the national infrastructure which provides a vital public service.

The EP Group has made a number of commitments to address these concerns, including upholding Royal Mail’s “universal service obligation”, which requires it to deliver letters six days a week for the same flat fee everywhere in the United Kingdom.

It has also promised to maintain employee benefits and pensions and keep Royal Mail's headquarters and tax base in the UK.

“EP Group has the utmost respect for the history and tradition of Royal Mail, and I know that taking ownership of this business will bring a great deal of responsibility – not just for the staff, but also for the citizens who rely on its services every day,” Kretinsky said in a statement.

He said IDS had the “potential to become one of the largest postal logistics groups in Europe”, but its “market is evolving rapidly” and it would need to modernise to keep up with rival delivery services. Kretinsky's private equity firm Vesa Equity Investments is already IDS's largest shareholder with a 27.6% stake.

The deal follows a tumultuous past few years for Royal Mail, which was privatized in 2013. Demand for its services has fallen sharply and it posted a loss of 348 million pounds ($445 million) for the year ended March 31 — slightly better than the previous year, when it posted a loss of 419 million pounds ($536 million).

“The IDS board believes the offer made by the EP is fair and reasonable given the uncertainties ahead, and provides investors with an opportunity to receive value at a significant premium,” IDS Chairman Keith Williams said in the statement.

However, not everyone agrees with this.

Dave Ward, general secretary of the Communication Workers Union, which represents about 110,000 Royal Mail employees, said the takeover was “a direct result of the failed and ideological privatisation that took place a decade ago, combined with the gross mismanagement of the company in recent years.”

He said employees want more commitment from EP Group about the company's future.

“We welcome some of the commitments but the reality is that postal workers across the UK have lost confidence in Royal Mail's senior management and the service has been deliberately undermined,” he said in a statement.

Kretinsky's move comes at a politically sensitive time, as the United Kingdom prepares for a general election on July 4. The proposed takeover would be subject to a national security review, possibly by a new government. Opinion polls suggest the Labor Party will win its first election since 2005 and replace the current Conservative administration.

The Labor Party has already taken a keen interest in the deal.

“Royal Mail is quintessentially British and the Labour Party will take all the steps necessary to protect its indisputable identity and its place in public life,” the party's business spokesman Jonathan Reynolds said in a letter to Kretinsky earlier this month.

A low-profile citizen of the Czech Republic, Kretinski made his fortune through a vast empire of European energy companies, retailers and football clubs. According to the Bloomberg Billionaires Index, he has an estimated net worth of $7.7 billion, and he owns a 27% stake in West Ham United Football Club.

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