- IDS previously rejected a £3.2bn bid last month as “opportunistic”.
- But the board is now “willing” to recommend the offer to shareholders.
- IDS claims to have secured commitments from EP Partners for the future of the service
Czech billionaire Daniel Kretinsky has submitted an enhanced takeover offer for Royal Mail owner International Distribution Services.
The 350p per share offer, which values IDS at £3.5bn, follows a rejected offer of 320p per share last month.
IDS chairman Keith Williams told investors the board is “willing to recommend” the offer, which he described as “fair” and accurately reflects “the progress being made at Royal Mail to adapt the business to a significant drop in letter demand and growth. in packages’.
Kretinsky, known as the Czech Sphinx, has privately assured that there will be no forced layoffs within the framework of his plans.
The offering values IDS shares at an impressive 72.7 percent premium to their closing price on April 16, before Kretinsky’s EP Partners made the initial offer.
IDS actions rose another 19.6 per cent to 324.6p in afternoon trading on Wednesday.
Royal Mail, which was privatized in 2013, is suffering huge losses and missed delivery targets.
IDS has been begging Ofcom to “speed up” a review that would allow it to cut services and save money.
Williams continued: “It is regrettable, however, that despite four years of petitions, the Government has not seen fit to undertake Universal Service reform to improve our financial position and ensure that Royal Mail can provide a financially sustainable service to the public. British”. .
“The board considers that the proposed contractual commitments to be offered by EP Group should ensure that IDS continues to deliver the key elements of the Universal Service in the UK and protect the interests of the workforce at both Royal Mail and (in North America and Europe) . delivery service) GLS.’
Kretinsky, known as the Czech Sphinx, has privately assured that there will be no forced redundancies as part of his plans following concerns raised by unions.
He also promised not to split up parent company International Distributions Services.
Kretinsky, 48, already owns 27.5 per cent of IDS and is co-owner of West Ham United and has a stake in Sainsbury’s.
A deal with EP Group would see Royal Mail come under foreign ownership for the first time since it was established by Henry VIII in 1516.
Chancellor Jeremy Hunt last month expressed concern about the bid and said there were lessons to be learned from the crisis at Thames Water.
IDS told shareholders on Wednesday: “The board has sought, and EP Group has agreed to offer as part of the proposal, a set of contractual commitments to protect key public interest factors and recognize Royal Mail’s status as a key party to the national infrastructure.
‘It is anticipated that the commitment to offer these contractual commitments to the UK Government will be reflected in the cooperation agreement between the parties if a firm offer is made.
‘The universal service, i.e. a single price service for the entire UK and continuity of six-day delivery for first class letters, will be maintained in future.
‘EP Group has agreed to provide contractual commitments to protect existing employee rights and continue to recognize the existing unions at both Royal Mail and GLS. The parties agree that the Royal Mail name and brand should be protected and that Royal Mail should continue to have its headquarters and tax residence in the United Kingdom.
“While these and other aspects of Royal Mail’s status as a key part of the national infrastructure are ultimately the Government’s responsibility to protect, the board feels a duty to raise these issues and seek to protect the public interest as well as the interests of employees before recommending an offer that would take IDS privately.’