Czech sphinx is closing its stake in Royal Mail, but losses at the postal service and delivery group mount as staffing dispute continues
Royal Mail’s largest shareholder has increased its stake in the delivery group as analysts warned of mounting losses amid a bitter dispute with staff.
Daniel Kretinsky, a Czech billionaire who owns Sparta Prague football club and has a stake in West Ham United, increased his stake in International Distribution Services (IDS), Royal Mail’s parent company, from 23 percent to 24 percent.
The purchase will fuel speculation that Kretinsky, nicknamed the Czech Sphinx for his inscrutable demeanor, is considering a buyout of the group, which fell through as Royal Mail has been beset by strikes that cost it £200m last year.
Inset: Czech billionaire Daniel Kretinsky, increased his stake in Royal Mail parent International Distributions Services from 23% to 24%
Under city rules, an investor must make a takeover bid on a company if its stake is 30 percent or more.
But an attack by Kretinsky is likely to spark intense political backlash and spark opposition from unions amid fears for jobs and working conditions.
The company is negotiating with the Communication Workers Union (CWU), which represents approximately 115,000 postal workers, in an effort to end the dispute, which focuses on pay and changes in work practices the company says are necessary to compete with rivals.
But there is little sign of a breakthrough after CWU bosses announced they could call more strikes if no deal is reached this week.
Analysts from JP Morgan predicted that the group would have to “substantially lower” its cost-cutting targets to secure a deal, predicting Royal Mail to lose £224m next year, £100m more than previous forecasts.
IDS shares fell 4.4 percent, or 10.2 pence, to 220.2 pence.
The troubles have weighed heavily on the share price, which has fallen nearly 40 percent over the past 12 months, presenting investors like Kretinsky with a great opportunity to increase their holdings.