World Stamps

Royal Mail parent company agrees to formal takeover

Jun 5, 2024, 9 AM

By David Hartwig

The board of Royal Mail’s parent company, International Distributions Services, has agreed to a formal takeover offer from Czech multibillionaire businessman and lawyer Daniel Kretinsky, the BBC reported May 29.

Kretinsky’s £3.57 billion (approximately $4.55 billion) offer for Royal Mail includes assumed debts, as well as commitments to retain Royal Mail’s name, brand, United Kingdom headquarters and United Kingdom tax residency.

The offer also includes protections for benefits and pensions for Royal Mail’s 150,000 employees.

International Distributions Services chair Keith Williams said May 29 that the board believed Kretinsky’s offer was “fair and reasonable,” and the that board negotiated a “far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards.”

Kemi Badenoch, the British secretary of state for business and trade, has the power to scrutinize and block the deal.

“Markets seem to think there is a chance the deal will be blocked by the current or any future government,” the BBC said, “as the shares in Royal Mail’s parent company are trading at a discount to the 370p [pence] a share being offered by Kretinsky.”

International Distributions Services shareholders will vote on the takeover in September.

Kretinsky is worth £6 ($7.6) billion, the BBC said, adding that “he made his money in Central and Eastern European energy via a labyrinthine structure of companies.

“This includes Eustream which transports Russian gas via pipelines that run through Ukraine, the Czech Republic and Slovakia.”

His portfolio includes sizable stakes in the supermarket group Sainsbury’s; the sportswear retailer Footlocker; and Royal Mail’s current parent company, International Distributions Services.

This story was updated June 5, 2024, with new information.

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