Royal Mail set to agree £3.5bn takeover by Czech billionaire

Royal Mail is set to accept a £3.5bn takeover offer from Czech billionaire Daniel Kretinsky, paving the way for the postal service to fall into foreign hands for the first time in its 500-year history.

The board of directors of parent company International Distributions Services (IDS) is expected to recommend a firm offer from Kretinsky, who must submit his proposal by the takeover deadline on Wednesday afternoon.

It had already said it was willing to accept the potential offer subject to commitments on public interest issues, including no forced job cuts, maintaining the Royal Mail brand and maintaining the company’s headquarters and tax base in the United Kingdom.

The deal, which values ​​IDS at more than £5bn including debt, is likely to attract scrutiny from regulators given the sensitive nature of Royal Mail’s business.

Kretinsky, known as the “Czech Sphinx”, is already the largest shareholder in IDS through his EP Group vehicle. He is also an investor in Sainsbury’s and West Ham Football Club.

Chancellor Jeremy Hunt has said any potential acquisition will be scrutinized under national security laws to ensure it does not pose a threat to critical infrastructure.

Kretinsky was previously subject to a national security investigation when he increased his stake in the company above 25% in 2022, although it was ultimately approved.

Business Secretary Kemi Badenoch has called a meeting with the billionaire in anticipation of the potential deal, while Shadow Business Secretary Jonathan Reynolds has also sought assurances.