(qlmbusinessnews.com Thurs. 16th May, 2024) London, UK —
Royal Mail Owner Nearing £3.5bn Takeover Deal.
The owner of Royal Mail, International Distribution Services (IDS), is on the verge of accepting an enhanced takeover offer worth approximately £3.5 billion from Czech billionaire Daniel Kretinsky‘s EP Group.
Following a revised proposal of 370p per share, up from the initial 320p per share bid made in April, IDS has indicated its inclination to recommend the new offer to its investors. Kretinsky, who currently holds a 27.6% stake in IDS, has provided a set of commitments aimed at safeguarding key public interest factors, including Royal Mail's commitment to the universal service obligation, workers' rights, the Royal Mail brand, and the retention of its headquarters in the UK.
However, the deal faces several hurdles, and both parties are expected to engage in further discussions regarding the proposal's specifics.
Royal Mail, which was privatized a decade ago, is obliged to provide a universal service, delivering letters six days a week and parcels five days a week. Despite its legal obligations, the company has experienced financial losses in recent years, attributed partly to declining letter volumes and delayed deliveries.
In response to the takeover bid, the Communication Workers Union (CWU) has expressed concerns about the future of postal services in the UK. CWU's general secretary, Dave Ward, emphasized the importance of the EP Group's commitment to working with the union and safeguarding the interests of Royal Mail's workforce.
Kretinsky has until 29th May to submit a firm offer, following his clearance to increase his stake in IDS above 22% in 2022. Additionally, Kretinsky holds interests in other UK entities, including supermarket giant Sainsbury's and West Ham United Football Club.
Labour shadow business secretary Jonathan Reynolds has called for safeguards to protect the Royal Mail brand and ensure its continued operation within the UK. Reynolds emphasized the symbolic significance of Royal Mail as a British institution and pledged to uphold its identity in public life.
As the potential takeover bid progresses, it is expected to face scrutiny from regulators and policymakers, given the vital role Royal Mail plays in providing essential services to millions of people across the country.
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