Foreign investors grant approval for Czech Sphinx's £3.6bn takeover of Royal Mail: National postal service changes hands overseas for the initial time
In a twist of history, the takeover of Royal Mail by the Czech billionaire Daniel Kretinsky is official. This means that Britain's beloved post carrier, established by Henry VIII in 1516 and remaining under domestic ownership since its inception, is now set to be under foreign control for the first time.
Kretinsky, also known as the "Czech Sphinx" due to his enigmatic business decisions, made an offer of impressive £3.6 billion for Royal Mail last year. The bid initially caused outrage among politicians and businesses alike. The acquisition move was triggered by Kretinsky's bewitching of 28 per cent stake in Royal Mail's parent company, International Distribution Services (IDS).
IDS announced on a recent day that investors holding more than 80 per cent of its shares had voted in favor of the takeover by Kretinsky's firm, EP Group. The required threshold for the acquisition was 75 per cent. The Czech billionaire expressed his satisfaction with the overwhelming support for his offer, reassuring the public that the postal service will continue to excel under its new ownership.
Kretinsky's business interests don't just lie in energy - he's also a major stakeholder in Sainsbury's and West Ham United football club, showcasing the wide range of sectors he's invested in aside from energy and media.
The funding for the takeover includes borrowing, with loans of £3 billion on top of IDS's existing £2 billion of debt. To secure ministers' approval, Kretinsky agreed to a series of conditions. Notably, the Government will retain a "golden share" in the business, allowing them to scrutinize any changes made to Royal Mail's ownership, tax residency, or headquarters location.
While the Universal Service Obligation (USO), which guarantees a high-quality postal service across the United Kingdom, will be retained, the regulators are set to change the rules, potentially reducing second-class deliveries to every other working day[1][2].
The Communications Workers Union, which represents over 100,000 Royal Mail workers, has vowed to challenge EP Group if they fail to uphold their obligations to postal workers and customers.
Footnotes:
[1] "Czech Investment in Royal Mail: What You Need to Know About Daniel Kretinsky", Investopedia.
[2] "Daniel Kretinsky: A Closer Look at the New Owner of Royal Mail", This is Money.
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- Daniel Kretinsky, known as the "Czech Sphinx," bought Royal Mail's parent company, International Distribution Services (IDS), in a takeover worth £3.6 billion, making him the owner of Britain's post carrier for the first time.
- Kretinsky's firm, EP Group, received overwhelming support from IDS investors, with more than 80% voting in favor of the takeover, surpassing the required threshold of 75%.
- Kretinsky, aside from his energy and media investments, also owns stakes in Sainsbury's and West Ham United football club.
- The financing for the takeover consists of borrowing, with loans of £3 billion added to IDS's existing £2 billion of debt.
- To secure approval from ministers, Kretinsky agreed to a series of conditions, including the Government retaining a "golden share" that allows them to scrutinize changes in Royal Mail's ownership, tax residency, or headquarters location.
