Royal Mail brand could be gone FOREVER in just five years with foreign owner set for takeover
Royal Mail has agreed a takeover offer from Czech millionaire
PA
Royal Mail parent firm International Distribution Services (IDS) said its board of directors has agreed to a £3.57 billion takeover offer.
Kretinsky made a formal offer for the business after initial proposals earlier this month.
The offer would see Kretinsky's EP Group, which already owns 27.6 per cent of the business, buy IDS for 370p per share, while offering a series of “contractual commitments and intentions” to protect public service aspects of the Royal Mail.
Kretinsky's has agreed that Royal Mail will deliver first-class post six days a week for the next five years after the acquisition but there are no confirmations on what could happen after this period.
If the deal goes through, the CEO has given commitments to maintain the universal service obligation of "one-price-goes-anywhere" on first class post for five years and to retain the Royal Mail’s headquarters in the UK and branding.
IDS said it had negotiated a “far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards”.
The entrepreneur Daniel Kretinsky made his fortune in the energy industry
PAIt also said it would protect existing employment rights of all IDS staff, and that there is “no intention to make any material changes to overall headcount or reductions in the number of front-line workers” beyond existing plans.
Shareholders will vote on the deal at IDS's next annual general meeting in September.
The board said the offer reflects “the progress being made on change at Royal Mail, as well as the execution risks associated with delivering longer term value for shareholders in light of uncertainty over the nature and timing of universal service reform and the need for swift and significant strategic investments”.
Keith Williams, chairman of IDS, said: “IDS has the potential to become a leading international logistics player.
“Both the IDS board and EP are acutely aware of their responsibilities to IDS and particularly to the unique heritage of Royal Mail and its obligations as the designated Universal Service Provider of postal services in the UK.
“The IDS Board has negotiated a far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards.
“These cover the provision of the one-price-goes-anywhere Universal Service Obligation (including First Class letters still delivered six days a week), the financial stability and maintenance of the IDS Group including Royal Mail, the maintenance of employee benefits and pensions, and ensuring Royal Mail remains headquartered and tax resident in the UK.”
Jonathan Reynolds, Labour’s shadow business secretary, commenting the development in the sale of Royal Mail, said: "Royal Mail is an iconic British institution with a unique place in our society and infrastructure.
"Labour will take the necessary steps to safeguard its undeniable identity and place in public life.
“These assurances are welcome that Royal Mail will retain its British identity and safeguard its workforce with no compulsory redundancies. Labour in government will ensure these are adhered to.
“While the Conservatives have ignored Royal Mail, Labour will ensure that it delivers once again for customers and postal workers."
The billionaire, aka the "Czech Sphinx" has various other investments including shares of West Ham Football Club and Sainsbury's.
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Unions and senior politicians have previously raised concerns about the potential takeover of the postal service. The acquisition will take Royal Mail’s parent company off the London stock market 11 years after it was privatised.
The Labour Party previously called for a commitment for the Royal Mail to remain domiciled in the UK and keep paying tax here as part of any deal.
Dave Ward, communication workers union general secretary said on Wednesday: “We do welcome some of the commitments that have been made 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.
“We will meet with EP Group next week and call for a complete reset in employee and industrial relations, the restoration of postal services and further commitments on the future of the company.
“We will also be directly engaging with the Labour Party and other stakeholders to call for a new model of ownership for Royal Mail where our members and customers have a direct say in key decisions and the creation of a golden share which will protect a key part of the UK’s communications infrastructure.”