IDS shares rise as Czech billionaire posts interest in Royal Mail

IDS shares rise as Czech billionaire posts interest in Royal Mail

Apr 17,2024
Shares in IDS, the owner of Royal Mail, rise after reports that it has received - and rejected - a bid from Czech billionaire Daniel Křetínský.

UK postal and courier service, Royal Mail, has received a takeover bid from Daniel Křetínský, a Czech billionaire who has also invested in Sainsbury's and West Ham United Football Club.

Royal Mail has reportedly rejected the offer, however, and, according to Reuters news agency, Křetínský is now renegotiating the offer.

Křetínský's EP Group has already acquired a 27.5% ownership share in Royal Mail through his Investment entity, Vesa. He reportedly contacted International Distributions Services (IDS), the holding Company of Royal Mail, about the offer earlier this month.

"EP Group recognises that Royal Mail is in a challenging situation," Křetínský's Company said in a newly released statement.

"EP Group also recognises that Royal Mail is an important national asset that would benefit from being able to take a longer-term view and is prepared to support this iconic business as it transforms and rebuilds into a modern postal operator delivering high-quality service to its customers, stability to its workforce and sustainable financial performance."

Last year, Royal Mail reported a "substantial loss" of £419 million (€490 million) for the financial year 2022/23.

Commenting on the matter, investment analyst at AJ Bell Dan Coatsworth, not only criticised the postal service for the delay in communicating the takeover offer but also the poor quality of services and unethical working practices.

"While a new pay deal was finally agreed last summer, it's fair to say that morale is still not high in the business, and households are certainly sick of letters taking ages to arrive. Posties are being worked to the bone and the system radically needs changing," Coatsworth said.

EP Group has until 15 May to either declare a definitive intention to make an offer for IDS  or withdraw from the process, the Guardian reported. 

While the Royal Mail decision remains uncertain, the present situation with IDS is much clearer. IDS shares surged by 20% on Wednesday, reaching 257p and placing the Company's value at £2.47 billion (€2.89 billion), following the Financial Times' disclosure of Křetínský's proposal.

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