A major European conglomerate led by Daniel Křetínský, who is known as the Czech Sphinx, has had a bid for Royal Mail’s parent company International Distributions Services (IDS) knocked back.
EP Corporate Group submitted a proposal to IDS’s board last week, seeking to purchase all the company’s outstanding shares not already owned by EP or its affiliate group Vesa Equity.
IDS’s board rejected this proposal but EP Group remains open to further discussions with IDS.
EP Group has revenues of around €100bnn and annual pre-tax profit of €8bn from companies under its control, and Kretinsky owns more than a quarter of West Ham United.
Its investment arm, EP Equity Investment, focuses on long-term investments in publicly traded companies, particularly in food, retail, logistics, media, and e-commerce sectors.
With challenges mounting for Royal Mail, in which Vesa Equity currently holds a roughly 28 per cent stake, EP Corporate Group has said private investment is “crucial” to the transformation and long-term success of IDS.
In a statement to the markets, EP Group said: “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.”
IDS shares jumped over 16 per cent on the news.
While no firm offer has been made, EP Group has until 15 May 2024 to announce its intention to either proceed with an offer or withdraw its interest.
Royal Mail is struggling to please customers and is looking to change a universal service obligation which makes much of its work loss-making; however IDS’ other business, an international distribution service, is riding high on the back of higher levels of ecommerce.
More to follow