The board of International Distribution Services, which owns Royal Mail, said that it has accepted a £3.57 billion buyout bid from the EP Group, led by Czech billionaire Daniel Kretinsky.
Businessman Mr Kretinsky already owned more than a quarter of IDS, which controls Royal Mail, Parcelforce, and the international mailing service GLS.
Known as the ‘Czech Sphinx’ for his inscrutable nature, his purchase of IDS – which may yet be subject to government scrutiny – could take the UK’s 500-year-old postal service into full foreign ownership for the first time.
The postal service must maintain its UK headquarters and tax residence to remain connected to Britain, and the EP Group’s bid, which is valued at 370p per share, complies with this requirement from IDS executives.
However, the deal looks set to include Royal Mail’s pending ask of delivering second class post every other weekday – which it applied to Ofcom for earlier this month, pending consultation.
Shareholders will vote on the deal at IDS’s next annual general meeting in September – at a perilous time for Britain’s universal postal service. The deal values the group at £5.2 billion.
Keith Williams, chairman of the company, said: ‘IDS has the potential to become a leading international logistics player.
‘Both the IDS board and EP are acutely aware of their responsibilities to IDS and particularly to the unique heritage of Royal Mail and its obligations as the designated Universal Service Provider of postal services in the UK.
‘The IDS Board has negotiated a far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards.
‘These cover the provision of the one-price-goes-anywhere Universal Service Obligation (including First Class letters still delivered six days a week), the financial stability and maintenance of the IDS Group including Royal Mail, the maintenance of employee benefits and pensions, and ensuring Royal Mail remains headquartered and tax resident in the UK.’
These promises, coupled with a vow not to take away the company’s assets and to continue using the Royal Mail brand and Royal Cypher, are only guaranteed for the first five years of Mr. Kretinsky’s ownership of IDS.
These assurances, coupled with commitments to acknowledge unions and keep providing first-rate posts six days a week, are not guaranteed to stay in effect after five years.
Mr Kretinsky said he had the ‘utmost respect for Royal Mail’s history and tradition’. The deal is not believed to come with any requirements of redundancies beyond those factored into the Royal Mail’s existing cost-cutting plans.
We have been let down by successive Governments for decades. To selling off our gold cheaply and those raiding our pensions, as well as, selling off our industries and key national assets.
Because it was British with royal authorisation, it was known as Royal Mail. Since it will no longer be controlled by the British, how in the world can it remain under that name?
Our power has been sold off, our water and now our postal service, where the service goes down the pan and prices go up.
THE MONTHLY MOSQUITO 