- Daniel Křetínský, co-owner of West Ham, in takeover bid for owner of Royal Mail
- IDS rejected the proposed offer, but the EP Group is considering options
A group led by West Ham shareholder and Czech billionaire Daniel Křetínský submitted a proposed takeover bid for Royal Mail owner International Distributions Services earlier this month, it has been revealed.
The EP Group said IDS had rejected its initial proposal, but added that it “looks forward to continuing to work constructively with the board as the EP Group considers all its options.”
In a statement on Wednesday, EP Group, controlled by Křetínský, said it has submitted a “non-binding indicative proposal” to the IDS board, asking for a recommendation for a possible cash offer for the part of IDS not yet is owned by EP Group and its associates.
Rejected: Royal Mail owner IDS has a
After the statement was published IDS shares rose 18.11 per cent or 38.8p to 253p, giving the company a valuation of around £2.5bn.
Britain has seen a revival in the approach to London-listed companies, which have suffered from low valuations.
EP Group said: ‘EP Group recognizes that Royal Mail is in a challenging situation.
“Weak financial performance, poor service delivery and slow transformation, in the face of a market undergoing structural change, have put the company under unsustainable pressure.
‘With increasing competition from multinational companies in the UK postal market, private investment in Royal Mail is becoming crucial.’
Křetínský, who is already the largest shareholder of Royal Mail’s London-listed parent company IDS through Vesa Equity Investment, has reportedly been working informally with advisers in recent months to consider acquiring the company.
A successful takeover bid would give Křetínský full control over IDS.
Křetínský, a former lawyer turned energy magnate known as the “Czech Sphinx,” has a 27 percent stake in IDS through investment vehicle Vesa Equity Investment that he founded in 2018 with business partner Patrik Tkac. Vesa Equity also has a stake in J Sainsbury and Foot Locker.
Ambitious: Daniel Křetínský parts owns West Ham and is the largest shareholder in IDS
IDS consists of two companies, including the international parcel network General Logistics Systems, based in Amsterdam, and the Royal Mail operations in the United Kingdom.
Royal Mail has faced multiple problems in recent years, with postal workers’ strikes, a cyber security incident, a fine from regulator Ofcom for missed delivery targets and losing a 360-year monopoly on delivering parcels from Post Office branches. toll.
Earlier this month, Royal Mail proposed a number of operational changes in a bid to save £300 million a year.
Royal Mail wants to deliver all non-first class and second class mail every other weekday, amid regulator Ofcom’s calls for universal service reform due to falling letter volumes.
Under the proposals, the delivery of standard bulk business mail for items such as bills or statements would be ‘aligned with Second Class’ so that they would arrive within three weekdays instead of two.
Royal Mail said it wanted to maintain daily delivery of first-class letters between Mondays and Saturdays under new reform proposals it has put forward.
The government previously opposed the restriction of the six-day service.
Parcel deliveries would remain unchanged and would still be delivered ‘up to seven days a week’, the report said.
IDS delivered 20 billion letters to 28 million addresses in the 2004-2005 financial year, but expects the number of letters to drop to 7 billion this year.