Royal Mail to hold fresh talks with investors as 'Czech Sphinx' plots another bid for postal service
Royal Mail will hold fresh talks with investors this week as a billionaire dubbed the Czech Sphinx plots another bid for the 500-year-old postal service.
The top brass at Royal Mail owner International Distribution’s Service are understood to be in regular discussions about the approach from billionaire Daniel Kretinsky and have been holding talks with shareholders.
IDS will be keen to canvas the opinion of other investors ahead of any further offers.
Talks about the bid will continue this week after one of the top shareholders, Redwheel, broke cover over the weekend to oppose the offer.
This month Royal Mail rejected the £3.2billion bid – or 320p per share – from Kretinsky, who co-owns West Ham United and has a stake in Sainsbury’s.
‘Opportunistic’: This month Royal Mail rejected a £3.2billion bid from Daniel Kretinsky
The postal service’s board said the offer undervalued the company and was ‘opportunistic’. But the tycoon is working on a new proposal and has until May 15 to submit a fresh bid. A deal with Kretinsky would see Royal Mail taken into foreign ownership for the first time since it was established by Henry VIII in 1516.
Redwheel, which is Royal Mail’s third biggest shareholder, became the first investor to publicly oppose the offer.
The firm’s value and income team co-head Ian Lance said: ‘The possible offer of 320p per share significantly undervalues IDS and its future prospects.
‘We call upon Ofcom to reflect on this offer which we regard as opportunistic.’
He added: ‘We do not believe it is in the interests of the shareholders, employees or customers of Royal Mail for it to be broken up or sold off.’
Redwheel echoed Royal Mail’s calls for an ‘urgent’ reform of the Universal Service Obligation amid a drop in letters posted. Unions oppose Kretinsky’s bid, saying ‘handing ownership to a foreign equity investor cannot be right’.
And any deal could be reviewed for national security risks. Ministers allowed Kretinsky to up his stake in Royal Mail when it breached the 25 per cent threshold in 2022.
But analysts have said a full takeover is likely to require clearance under the National Security & Investment Act.
Meanwhile the Chancellor last week voiced concerns over the offer, saying there were lessons to be learned from the crisis at Thames Water.
Asked about a foreign takeover of IDS, Jeremy Hunt said: ‘Do I look at what’s happened to some of the water companies and say that we shouldn’t learn any lessons? Absolutely not.’