- Royal Mail owner rejected deal at 320p on 11 April
- Vesa Equity says private investment in UK mail system "crucial"
Czech billionaire Daniel Křetínský is attempting to buy the whole of International Distributions Services (IDS), the parent company of Royal Mail – but has so far been thwarted.
Křetínský, who already owns 27.5 per cent of IDS through his Vesa Equity Investment vehicle, submitted a “non-binding indicative proposal” to the courier group on 9 April valuing the company at around £3bn, or 320p a share. The proposal was rejected by IDS, but Křetínský said he will “continue to engage constructively” with the company. Křetínský must now announce a firm intention to make an offer by 15 May under Takeover Panel rules.
IDS said the board "carefully considered the possible offer and concluded it significantly undervalues IDS and its future prospects".
"The board believes the timing of the proposal is opportunistic," the company added. "It does not reflect the growth potential and prospects of the company under a new management team, a significant modernisation programme underway at Royal Mail, and the ongoing review by Ofcom in relation to the Future of the Universal Service Obligation."
The proposal was submitted by EP Corporate Group, the European industrial giant controlled by Křetínský. The group said Royal Mail was in a “challenging situation” given its “weak financial performance, poor service delivery and a slow transformation”.
“With the increasing competition from multinational companies in the UK postal market, private investment in Royal Mail becomes crucial,” it said.
Shares in IDS initially jumped by over 20 per cent to 262p after the Financial Times reported an incoming approach from Křetínský, but dropped back to 244p after the Vesa statement.
The government has previously scrutinised his holding in the company but accepted an increase in his stake from 22 per cent to 27 per cent in 2022.
Křetínský also owns 29.9 per cent of PostNL in the Netherlands and a 10 per cent stake in J Sainsbury (SBRY). Royal Mail is in the midst of a reform push, which would allow it to cut down letter deliveries to three of six days a week for non-first-class mail, diverting more resources to parcels.
This story has been updated with the IDS comments and offer price
