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The board of the company that owns Royal Mail is expected to recommend a new takeover bid for the 500-year-old organization on Wednesday.
Czech billionaire Daniel Kretinsky will make a £5 billion bid, including assumed debt, for the company, which employs more than 150,000 people.
It is thought the offer will include commitments to retain the name, brand, UK headquarters and UK tax residence, as well as ruling out redundancies.
Business Minister Kemi Badenoch, who has not yet met Mr Kretinsky, has the authority under the National Security and Investment Act to scrutinize and potentially block the deal.
The markets seem to think there is a chance the deal will be blocked by the current or a future government, with shares in Royal Mail’s parent company trading at a 13% discount to the 370p a share becomes offered by Kretinsky.
However, others point to the fact that the government did not intervene at a time when it could have done so in 2022, when the entrepreneur increased his stake from 22% to the 27.5% of the shares he already owns.
Chancellor Jeremy Hunt has said that any takeover bid for Britain’s Royal Mail would be subject to “normal” national security scrutiny but would in principle not be opposed.
Shadow business secretary Jonathan Reynolds wrote to Mr Kretinsky two weeks ago to highlight the historic and crucial role Royal Mail played in Britain’s life and economy, setting out the commitments expected from Mr Kretinsky’s offer will entail.
BBC News has seen Mr Kretinsky’s response to Mr Reynolds’ letter, in which he wrote that the postal service will remain headquartered and tax resident in Britain, that it will recognize trade unions and that Royal Mail will be the Universal Service to stay. Provider.
“We believe that if this is accepted by IDS [International Distributions Services, parent company of Royal Mail] shareholders, our offer will provide Royal Mail with the opportunity to secure its financial future,” Mr Kretinsky wrote.
Royal Mail, which was split from the Post Office and privatized ten years ago, is legally required to provide a “universal service” with one price, meaning it delivers letters six days a week, Monday to Saturday. must deliver. and packages from Monday to Friday.
But the company’s performance has deteriorated in recent years, leading to heavy financial losses, with customers regularly failing to receive letters, including important medical appointments and legal documents, on time.
Parent company International Distribution Services made a small profit last year, generated entirely by its German and Canadian logistics and parcels businesses, offsetting losses at Royal Mail.
The number of letters sent by post has plummeted, with half the number of letters sent compared to 2011 levels. Meanwhile, parcel deliveries have become more popular – and more profitable.
The universal service obligation is currently under review, with Royal Mail suggesting to Ofcom that limiting second class deliveries to every other weekday would save up to £300 million a year and give the company “a fighting fighting chance”.
Dave Ward, general secretary of the Communication Workers Union (CWU), which represents postal workers, said: “This situation is a direct result of a botched and ideological privatization… mixed with the blatant mismanagement of the company in recent years.”
“These events have left one of Britain’s most iconic and important companies ripe for takeover by foreign investors,” he added.
Mr Ward did say he welcomed some of the commitments put forward so far, “but the reality is that postal workers across the UK have lost all confidence in Royal Mail’s senior management and the service has been deliberately wound down. “
The union will meet with Kretinsy’s EP group next week, calling for a “complete reset” of employee and labor relations, as well as further commitments on the company’s future.
It will also work directly with Labor and others to call for a new ownership model for Royal Mail, hoping its members will have “a direct say in key decisions”.
Entrepreneur Daniel Kretinsky made his fortune in the energy sector, but in recent years has diversified his interests into retail and logistics. He owns 10% of Sainsbury’s football club and 25% of West Ham football club.
The BBC understands that the Department of Business and Trade expects any bidder for the Royal Mail Group to engage with ministers.
International Distribution Services declined to comment.
The Czech and the Post: Who is Daniel Křetínský?
Daniel Křetínský, the future owner of the Royal Mail, has all the hallmarks of the modern billionaire.
The 48-year-old Czech businessman and lawyer is worth a whopping £6 billion, according to the Sunday Times Rich List.
He owns nice houses in more expensive areas.
These include Heath Hall on Bishop Avenue in London – also known as Billionaires’ Row – which he bought for £65 million and once rented to pop star Justin Bieber for a reported £25,000 a week.
He also spent €21.5 million purchasing a Parisian mansion across the street from the Elysée Palace from Russian oligarch and fertilizer magnate Dmitry Rybolovlev and his ex-wife.
Mr Křetínský also owns a stake in the private island resort of Velaa in the Maldives.
And like others in his wealthy category, he has one or two football clubs. This includes AC Sparta Prague and the British West Ham, in which he has a 27% interest.
Apparently known as the “Silent Sphinx” because of his inscrutable style, what is known about Mr. Křetínský is that he made his money in Central and Eastern European energy through a labyrinthine structure of companies.
This also applies to Eustream, which transports Russian gas via pipelines that pass through Ukraine, the Czech Republic and Slovakia.
In Britain, Mr Křetínský has built up quite a portfolio of well-known brands through Vesa Equity Investment, a private company registered in Luxembourg.
These include significant stakes in supermarket group Sainsbury’s and sportswear retailer Footlocker, as well as International Distribution Services, the parent company of Royal Mail.