We MUST stop this Royal Mail heist: six reasons why selling to Czech tycoon is bad for investors, bad for customers and bad for Britain

The postman, in his all-weather shorts, is so loved in a Hertfordshire village that every Christmas resident buys him a £500 gift voucher, plus champagne and chocolates.

This festive season, whether you love it or hate it, the Royal Mail is an enduring part of our lives.

Whether you’re queuing for an hour and a half to send a gift to a loved one Down Under or spending a whopping £13.20 for a book of eight barcoded First Class stamps, most households have a relationship with the Royal Post.

There’s nothing better than receiving a handwritten card (even if it’s delayed!) in an age when e-greetings end up in the inbox alongside scams, junk mail and other unwanted messages.

The bright red Royal Mail letterboxes with the monarch’s coat of arms, the stamps with the king’s head – even the relentless nuisance of having to visit the often remote sorting offices to collect parcels – are an unchanging aspect of the British life.

Yet this well-known institution, which trades on the London stock market as International Distribution Services (IDS), is facing an existential crisis.

Daniel Kretinsky, a Czech billionaire who has had historic entanglements with Vladimir Putin’s regime in Russia, is set to take power in a £3.6 billion takeover bid.

Business Secretary Jonathan Reynolds has given a thumbs-up to a deal, naively taking at face value assurances about the future of the postal service and how it will be run.

If you think the post is too expensive now – £1.65 for a first class stamp and 85p for a second class – just wait a minute.

In terms of delays, Royal Mail has just been fined £10.5 million for late delivery of more than one in four first-class letters. This too could become even worse under Czech hands, as Kretinsky will likely look to maximize his profits and scale back service commitments.

Yet our boorish, insensitive and business-naive Labor politicians don’t seem to care.

Reynolds has declared potential buyer Kretinsky a “legitimate businessman.”

Scrutiny by a government investigation under the National Security & Investment Act failed to kill the deal.

There are six good reasons why the government, the public, the posts and the shareholders should have told Kretinsky to undertake an increase:

1) Russian connections

Kretinsky, 49, head of the purchasing consortium, is a billionaire. He has amassed much of his wealth through energy and pipeline deals with Russian President Putin, which are currently sanctioned by the West.

He remains embroiled in a protracted and complex legal dispute in Russia over the fate of his coal interests.

Kretinsky is backed in his deal, which also includes ownership of West Ham United FC, by elusive Slovak investment bank J&T, which is embroiled in an ongoing court case over alleged corruption in the far-flung Turks and Caicos Islands.

2) Debt pile

The bid is to be financed with around £3 billion of high-interest loans provided by foreign banks.

This is in addition to the £2 billion of debt already on the balance sheet of Royal Mail owner IDS.

Such debt-driven takeovers by indifferent foreign financiers have a terrible track record.

The implosion of Thames Water, which is currently awaiting a bailout, has been prompted by the need to pay interest costs on £16 billion of debt.

The result is underinvestment in fixing leaking pipes and tonnes of sewage entering the River Thames. At grocer Asda, a heavily indebted takeover has caused the group to suffer a disastrous decline in sales, market share and reputation.

3) Security

The roots of the Royal Mail can be traced back 500 years to a ‘secure’ courier service for King Henry VIII.

Centuries later, this is how vital public services such as HMRC, the Metropolitan Police, the NHS and other parts of the government communicate with us securely in an age of internet scams.

It is of course also crucial for postal voting and therefore for our democratic process. Most households in Britain will be familiar with the brown envelopes with windows that end up on our doorstep.

4) Culture

Royal Mail is one of the most recognizable brands in Britain.

The postman in his shorts is, in all weather conditions, a visitor that we eagerly look forward to, especially in the run-up to Christmas, New Year or a birthday.

The Royal Family is celebrated with a figure, dating back to the time of Queen Victoria, on the bright red postboxes in every town, city and hamlet across the length and breadth of Britain.

The stamps, decorated with the monarch’s head, are loved by every student collector.

The commemorative coins, which glorify everyone from Sir Winston Churchill to the fictional Harry Potter, provide snapshots of everything that makes Britain great.

The price of a first class stamp may seem high at £1.65, but the service is delivered the next day to the most remote parts of the country (usually!).

No other commercial service would offer this. This unique British heritage is unlikely to mean much if Royal Mail were to become merely an outpost in Kretinsky’s commercial empire that has spread from Eastern Europe.

He can also try to maximize his profits by cutting back on services and raising stamp prices.

5) Investors

Shareholders, including postal workers and other workers who own almost 5% of the shares, are at risk of being shortchanged.

A group of activist investors believe that if the regulator, Ofcom, allows Royal Mail to be more flexible on the price of first-class deliveries and the regularity of second-class service, Kretinsky’s offer price of 370 pence per share will be a bargain turn out to be. for him.

They also think that Royal Mail will have been sold for far less than it is actually worth.

In that case, the board, led by former British Airways boss Keith Williams, should withdraw its support or resign, rather than allow shareholders to be shortchanged.

6) City seam

Consultancies such as Goldman Sachs, lawyers, banks and consultants are lining up to collect eye-watering fees of £146 million if the deal goes through.

They are not proud of a British heritage connection and will tell the board that they have no choice – saying it is their fiduciary duty (obligation under company law) – but to accept the offer.

It’s nothing like that. Stock market history shows us that courageous boards such as pharmaceutical group AstraZeneca, miner Anglo American and others stand firm and reject unsatisfactory deals.

This shows respect for their company’s history and a commitment to doing their job, which is creating value for the shareholders themselves, rather than selling out.

Too many foreign takeovers of British companies like Thames Water, Heathrow Airport and Arm Holdings have been bad for investors, bad for customers and bad for Britain.

There is still time to overturn the bid for Royal Mail.