Royal Mail owner International Distribution Services (IDS) announced on Wednesday that it has received a raised takeover proposal worth around £3.5bn from Czech billionaire Daniel Kretinsky.
The company’s shares soared 20 per cent after the update, with IDS saying it would be “minded” to back the deal if a firm offer is made.
Kretinsky’s EP Group, which already holds a roughly 27.6 per cent stake in IDS through its affiliate group Vesa Equity, is now offering 370p per share, including a 10p dividend.
This figure marks a 72.7 per cent premium to the IDS’ stock price immediately before the billionaire’s first bid was confirmed in April.
His initial £3.1bn, 320p per share, takeover proposal was rejected by IDS’ board for being “opportunistic” and not reflecting “the growth potential and prospects of the company”.
Kretinsky, who is known as the Czech Sphinx and owns more than a quarter of West Ham United, had a deadline of 5pm today to make another proposal.
The potential takeover comes as Britain’s embattled postal service calls for urgent action to modernise its operations as it faces rapidly declining letter volumes and increased competition from niftier couriers.
Earlier this year, communications watchdog Ofcom made proposals including a slower first-class service and reducing the number of delivery days from six to three.
Keith Williams, chair of IDS, said on Wednesday: “The board is minded to recommend this offer price, which it considers to be fair and reflects the value of GLS’ current growth plans and the progress being made on change at Royal Mail to adapt the business to a significant fall in the demand for letters and growth in parcels.
“It is however regrettable that despite four years of asking, the government has not seen fit to engage in reform of the Universal Service and thus improve our financial position and ensure that Royal Mail could provide an economically sustainable service to the British public.”