Royal Mail is just the latest British company to be targeted by foreign buyers this year, with bids from abroad valued at more than £60 billion.
On one of the most dramatic days in the postal service’s 508-year history, parent company International Distribution Services (IDS) backed a takeover bid from Czech billionaire Daniel Kretinsky of 370p per share, or £3.5 billion.
The offer marked an increase of almost 16 percent on the previously rejected bid of 320p, submitted by the tycoon’s EP Group.
And this brings the total value of bids for London-listed companies from abroad this year to more than £60 billion, according to city broker Peel Hunt.
Kretinsky – known as the ‘Czech Sphinx’ – already owns 27.5 percent of IDS, is co-owner of West Ham United FC and has a stake in Sainsbury’s.
Takeover target: Royal Mail parent International Distribution Services backed a £3.5 billion bid from Czech billionaire Daniel Kretinsky
IDS chairman Keith Williams said it was a ‘fair’ award and reflected ‘current growth plans and progress made’.
A deal with Kretinsky would see the loss-making Royal Mail fall into foreign hands for the first time since it was founded by Henry VIII in 1516.
Although IDS shares rose 16 per cent, or 43.4p, to 314.8p, the price is still well below the offer price of 370p, suggesting investors believe the deal may not go ahead.
The takeover follows a series of takeovers in 2024, in which packaging group DS Smith, telecom testing company Spirent Communications and transport company Wincanton, among others, fell into the hands of foreign bidders.
Last month, cyber security group Darktrace backed a £4.2 billion takeover by US private equity firm Thoma Bravo.
But some companies, while targeted by foreigners, have resisted.
Anglo American has rejected two offers from Australian miner BHP, while Currys and Direct Line have defended themselves against bids.
In a further act of defiance, the FTSE 250 Wood Group was the latest to fend off a takeover attempt by Dubai rival Sidara.
The industrial engineering group yesterday rejected a £1.5 billion bid worth 212p per share, just a week after Sidara’s initial offer of £1.2 billion was rejected.
But the attack on UK plc has fueled concerns that British companies are undervalued and facing a “feeding frenzy” of merger and acquisition activity.
Another concern is the lack of companies entering the stock market through IPOs.
One analyst even warned that London’s stock market was facing a ‘death by a thousand cuts’ as listed companies bow to foreign takeovers.
But City analysts have suggested that IDS, which also owns profitable Dutch-based parcel company GLS, has managed to land a pretty sweet deal given its complex past.
Danni Hewson, analyst at AJ Bell, said: ‘When you add in all the baggage that comes with IDS, it feels like a fair price and it’s hard to see anyone else rushing to outdo that offering.’
But she added: ‘The fact that the shares are not trading near the offer price of 370 cents implies that the market has little confidence that it will get over the line.’
Royal Mail has been on a mission to reform the Universal Service Obligation, meaning it must deliver letters nationwide at the same price every day except Sunday.
Williams criticized ministers for failing to implement reform of the Royal Mail, leaving it vulnerable to a takeover.
“It is regrettable that, despite four years of requests, the Government has not seen fit to reform the Universal Service to improve our financial position and ensure that Royal Mail can provide an economically sustainable service to the British public,” he said. .