Secretive Czech tycoon nears £3.6bn Royal Mail takeover – but doubts remain over motives
Royal Mail's £3.6billion sale to a secretive Czech billionaire has been cleared by shareholders. The takeover by publicity-shy Daniel Kretinsky paves the way for the postal giant to fall into foreign hands for the first time in its more than 500-year history.
Just over 80% of investors in Royal Mail parent company International Distribution Services (IDS) gave the deal the go-ahead, above the 75% threshold needed. Mr Kretinksy, who also has shares in West Ham United and Sainsbury's, insisted his EP Group company was committed to 'putting employees and customers at the heart of everything IDS does' and in 'sharing the fruits of success with employees'.
He added: 'We will only succeed with a clear, shared vision for the future that we can all work towards.'
The 49-year-old, dubbed the Czech Sphinx because of his investing style, has given a series of commitments in a bid to win over sceptics, including a pledge to deliver letters six days a week under the Universal Service Obligation (USO). But the takeover has received a muted welcome from the Communication Workers' Union and criticism from some quarters.
IDS first agreed to the acquisition in May last year, and it was cleared by the government in December. The sale will also end Royal Mail's turbulent 12-year spell as a publicly listed company, with trading in IDS shares expected to cease on June 2.
Keith Williams, the chair of IDS, said: 'We have been pleased to secure a far-reaching package of legally binding undertakings and commitments, which have been endorsed by government. These provide our customers, colleagues and broader stakeholders with safeguards for the provision of the Universal Service Obligation, the ongoing financial stability of Royal Mail, the maintenance of colleague benefits, and Royal Mail's broader role in the United Kingdom.'
Dave Ward, CWU general secretary, said: 'Today represents a pivotal moment in the history of Royal Mail - one of our country's most iconic and important companies. The CWU have reached a groundbreaking agreement with EP Group that provides the platform for a fresh start and the rebuilding of Royal Mail. We will not hesitate to challenge EP Group if they do not fulfil their obligations to postal workers and customers.'
Amanda Fergusson, chief executive of the Greeting Card Association, said: 'Mr Křetínský will own a British institution that's been precious to the fabric of the nation for over 500 years. And while we acknowledge and welcome his investment plans and public promise to uphold Royal Mail's obligations under the USO, our members remain deeply concerned about current plans to weaken Royal Mail's commitment to customers.'
Comment by Graham Hiscott, Head of Business
Forgive me for being sceptical, but we've been here before.
Grand promises before Royal Mail's 2013 privatisation ended with this cherished national asset being flogged on the cheap, with bankers and City wheeler dealers making a fortune. And what of all the promised investment? Try telling that to households and businesses landed with rocketing stamp prices and delivery targets Royal Mail seems to have given up any hope of hitting.
But at least as a listed company we saw what was going on, warts and all. Instead, publicity-shy Daniel Kretinsky's debt-fuelled takeover will take it into the shadows, away from public glare - and scrutiny. Just why does a Czech tycoon who made his money in energy want to own Royal Mail? Maybe he's a die-hard Postman Pat fan.
As we have seen many times before, pledges made to get deals over the line count for nothing when there is big money to be made. Time will tell, but expect more lockers and potentially fewer posties - who, let's face it, help make Royal Mail different from any other courier firm. The union needs to hold Kretinsky's feet to the fire - one of our best-loved institutions is at stake.
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