Source: AFP
The owner of Britain’s Royal Mail said on Wednesday it had accepted a takeover offer from Czech billionaire Daniel Kretinsky worth 3.6 billion pounds ($4.6 billion).
It comes after Kretinsky’s EP Group formalized an enhanced offering for International Distribution Services.
“The IDS board believes that the offer from the EC is fair and reasonable,” IDS chairman Keith Williams said in a statement published on the London Stock Exchange.
EP already has a 27.6% stake in IDS, and the acquisition is subject to shareholder and regulatory approvals.
Former state monopoly Royal Mail was privatized in 2013 and has since seen its core letter business eroded as consumers increasingly communicate online, which has instead helped its international parcel business, GLS.
Britain’s communications regulator Ofcom has suggested Royal Mail reduce delivery to five days, or even three days a week, potentially saving the company hundreds of millions of pounds.
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IDS has long called for a renewal of the Universal Service Obligation (USO), which requires Royal Mail to deliver letters six days a week to all 32 million addresses in the UK for the price of one stamp.
European potential
The EP on Wednesday described IDS as “a strong business with strong foundations and the potential to become one of the leading postal logistics groups in Europe”, subject to modernization that includes reforming the USO.
Source: AFP
At the same time, Kretinsky said his team “have the utmost respect for the history and tradition of Royal Mail”, adding that owning a business with more than 500 years of history “will come with enormous responsibility — not only for the employees but also for the citizens who rely on its services every day”.
The accepted offer was priced at 370 pence per IDS share. Following Wednesday’s announcement, IDS shares rose 2.9 percent to 330.5 pence in early London trading.
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“GLS Group’s international arm has long been seen as the jewel in the company’s crown, enjoying a level of success that Royal Mail has found elusive and EP Group would be looking at long-term opportunities here,” noted Susannah Streeter, head of money and markets. at Hargreaves Lansdowne.
The EP said it would honor a commitment by IDS management not to impose compulsory redundancies at Royal Mail until April next year.
Dave Ward, general secretary of the Communications Workers’ Union, said he would meet with the EP next week when he would seek “further commitments on the future of the company”.
IDS employs approximately 153,000 staff, with the vast majority representing Royal Mail.
Source: AFP