Owners of Royal Mail to support £5 billion acquisition bid
It is anticipated that on Wednesday, the Royal Mail-owning company’s board would propose a new takeover bid for the 500-year-old institution.
More than 150,000 people work for the company, and its offer from Czech billionaire Daniel Kretinsky is £5 billion (including assumed debts).
The offer is said to contain stipulations to avoid mandatory layoffs, keep the name and brand intact, maintain UK headquarters and tax residency, and more.
The National Security and Investment Act gives Business Secretary Kemi Badenoch the authority to review and perhaps halt the deal, even though she has not yet spoken with Mr. Kretinsky.
Shares in Royal Mail’s parent firm are trading at a 13% discount to the 370p a share offered by Kretinsky, suggesting that the deal could be vetoed by the current or future government.
While some argue that the government should have stepped in when the entrepreneur increased his holdings from 22 percent to 27.5% in 2022, others emphasize that the government missed an opportunity to do so.
Chancellor Jeremy Hunt has stated that the British government would conduct “normal” national security reviews of any proposed acquisition of Royal Mail, but that he would not oppose the move in principle.
Jonathan Reynolds, the shadow secretary for business, wrote to Mr. Kretinsky two weeks ago, outlining the expected commitments made by Mr. Kretinsky as part of his offer, and stressing the historic and vital role that Royal Mail played in the life and economy of the UK.
According to BBC News’ review of Mr. Kretinsky’s response to Mr. Reynolds’ letter, the postal firm will maintain its UK headquarters and tax residency, recognize workers’ unions, and maintain its status as the Universal Service Provider.
“Our offer will provide Royal Mail with an opportunity to secure its financial future,” Mr. Kretinsky said, expressing his belief that the acceptance of the proposal would benefit IDS shareholders. IDS is Royal Mail’s parent company.
Following its privatization a decade ago, Royal Mail was required by law to provide a “universal service” that allows customers to send letters and packages anywhere in the world for a flat rate. This means that letters must be delivered six days a week, Monday through Saturday, and parcels must be delivered Monday through Friday.
Customers frequently do not receive letters, including crucial legal documents and medical appointments, on time, and the company’s performance has declined in recent years, resulting in significant financial losses.
As a result of its logistics and parcels operations in Germany and Canada, parent company International Distribution Services turned a modest profit last year, more than making up for Royal Mail’s losses.
The amount of letters being sent has decreased dramatically, with half of the number being sent compared to levels in 2011. Parcel delivery services, meanwhile, have grown in popularity and revenue.
During the assessment of the universal service obligation, Royal Mail proposed to Ofcom that the company might save £300 million annually and give itself “a fighting chance” by lowering second class deliveries to every other weekday.
Postal employees’ union general secretary Dave Ward blamed “this situation is a direct result of a failed and ideological privatisation… mixed with the blatant mismanagement of the company in recent years.”
“These events have ripened one of the most iconic and important companies in the UK for a takeover by foreign investors,” said the CEO.
Although Mr. Ward acknowledged the positive steps taken thus far, he added, “but the reality is postal workers across the UK have lost all faith in the senior management of Royal Mail and the service has been deliberately run down.”
Following next week’s meeting, the union will demand a “complete reset” in employee and industrial relations and additional promises for the company’s future from Mr. Kretinsy’s EP Group.
It plans to lobby for a different ownership structure for Royal Mail, one in which members would have a “direct say in key decisions,” and will engage with organisations like Labour to do so.
Although he first became wealthy in the energy sector, entrepreneur Daniel Kretinsky has since expanded his holdings into the retail and logistics industries. He has a 25% stake in West Ham United Football Club and 10% in Sainsbury’s.
Any potential buyer for the Royal Mail Group would be expected to communicate with ministers, according to the BBC’s understanding of the Department of Business and Trade.
No remark was offered by International Distribution Services.
Daniel Křetínský: A Cypriot and an emailer.
All the hallmarks of a contemporary billionaire are possessed by Daniel Křetínský, who aspires to acquire the Royal Mail.
The Czech businessman and lawyer, who is 48 years old, has an impressive net worth of £6 billion, as reported in the Sunday Times Rich List.
Affluent neighborhoods are home to his mansions.
As an example, he reportedly rented out Heath Hall to Justin Bieber for £25,000 per week at a price of £65 million when he purchased it on London’s Bishop Avenue, also known as billionaire’s row.
Additionally, he paid €21.5 million (£18.3 million) to purchase a townhouse in Paris adjacent to the Elysee Palace from the ex-wife and Russian businessman Dmitry Rybolovlev.
Additionally, Mr. Křetínský has a stake in the Maldives’ Velaa private island resort.
Not to mention that he owns a football club or two, much like other wealthy people in his class. Among them are AC Sparta Prague and West Ham United of England, in which he has a 27% ownership interest.
What is known about Mr. Křetínský is that he amassed wealth in the energy sector of Central and Eastern Europe through a complex web of firms. He is reportedly referred to as the “quiet sphinx” due to his enigmatic personality.
Eustream is one such company; it carries gas from Russia via pipelines that pass through Slovakia, the Czech Republic, and Ukraine.
Through his Luxembourg-based private corporation, Vesa Equity Investment, Mr. Křetínský has amassed a substantial portfolio of renowned brands in the United Kingdom.
Among these are substantial holdings in multinational conglomerate Sainsbury’s and sportswear store Footlocker, in addition to Royal Mail’s parent firm, International Distribution Services.
https://www.imdb.com/list/ls547510848/
https://www.imdb.com/list/ls547515506/
https://www.imdb.com/list/ls547515730/
https://www.imdb.com/list/ls547515108/
https://www.imdb.com/list/ls547515164/
https://www.imdb.com/list/ls547515318/
https://www.imdb.com/list/ls547515653/
https://dailybusinesspost.com/support-for-a-5-billion-acquisition-bid-by-royal-mails-owners/
