Chancellor Jeremy Hunt has increased pressure on ‘Czech Sphinx’ Daniel Kretinsky after his £3.6bn bid for Royal Mail sparked fears over the future of the 508-year-old postal operator.
Hunt said regulators should examine “very carefully” the five-year commitments made by the billionaire, which include promises of jobs and six-day service across the UK.
And the promise not to split Royal Mail’s parent company, International Distribution Services (IDS), which also includes the European parcel business GLS, only lasts three years.
Hunt told LBC: ‘That’s something regulators need to look at very carefully. We will make sure that whoever takes over the Royal Mail, if anyone, that those things people depend on are safe.’ Pressed on Kretinsky’s assurances, he said: “I can’t predict what will happen in five or ten years, but three years is a long time.”
And I’m sure the Government will keep it under review. And it is completely possible; we’ll decide we should extend it beyond that.”
Concerns: But Chancellor Jeremy Hunt (pictured) has indicated he is not opposed in principle to the Royal Mail deal.
The comments come a day after IDS accepted a bid from Kretinsky’s EP group, which will see Royal Mail fall into the hands of foreign owners.
“I believe that for our economy to modernize we need to attract investment from all over the world,” said the Chancellor.
But the deal will also face a national security investigation and City analysts are skeptical that the promises made by the bidder will be enough to convince ministers to give it the green light.
Yesterday the shares fell 1p, or 0.3 per cent, to 334p, well below EP’s offer price of 370p and a sign that the City does not yet see the acquisition as a done deal.
Kretinsky is IDS’s largest shareholder with a 28 percent stake. But his offer faces opposition from other investors.
Columbia Threadneedle Investments, which owns a stake of about 5 percent, believes the offer undervalues the group. Jeremy Smith, its co-head of UK equities, said: “We believe management has done a good job of transforming the business and that additional shareholder value can be generated.”
Results published last week show Royal Mail is losing £1m a day, although the company says it is improving its performance.
