Special delivery: Daniel Kretinsky could increase his stake in Royal Mail above 25 percent
At the sporting events where they are spotted together, Daniel Kretinsky and Anna Kellnerova can easily blend into the crowd. But the bespectacled 47-year-old lawyer and his much younger jumping girlfriend are one of the world’s richest couples, basking in his fortune.
Kellnerova is one of four children of the Czech Republic’s richest man before his death last year, while Kretinsky amassed his fortune, estimated at £4.3 billion, initially by investing in power plants. He is known as the Czech Sphinx for his poker-centric approach to investing. He has major interests in famous British names including West Ham United and Sainsbury’s.
Now the city is speculating it’s ready to dive into one of our most iconic companies, International Distributions Services (IDS), better known as the five-century-old Royal Mail – embroiled in wage disputes with staff and making losses. of £1 million per day.
IDS will announce the latest half-year figures this week, on Budget Day, and they will not be pretty. City analysts agree that Royal Mail UK’s letter and parcel services will lose more than half a billion pounds. The IDS group as a whole, including a profitable international parcels business, is expected to be in the red at £258 million.
The prospect of a foreign magnate taking over such a historic institution rooted in Henry VIII is likely to alarm many observers, from union bosses to petty shareholders and the letter-writing public. An insider described it as a “classic private equity situation” in which Kretinsky could strip all valuable assets before a “race to the bottom on pay and terms.” Of course this is speculation, but the nerves are nervous.
Parent company IDS has already announced a £219 million loss in the first half of this year, while 10,000 jobs will be cut.
It is a vulnerable situation for an important part of the British communications infrastructure. Kretinsky is already the largest shareholder in IDS, owning more than a fifth of the company through its Luxembourg investment vehicle Vesa.
He received approval from the British government this month to increase his stake to more than 25 percent. This basically gives him the green light to launch a full takeover bid.
Although we are in an era of instant messaging, this is worrying as the post remains an essential part of the country’s communications. And Kretinsky has ties, albeit indirectly, to Gazprom, the Kremlin’s gas company. This is through a stake in gas pipeline company Eustream, which has gone to great lengths to condemn Russia’s invasion of Ukraine. There are other concerns. Why should a Czech billionaire care if a British pensioner can’t afford to stamp a card for a grandchild? The price of first-class postage has risen by 3,000 percent since the 1970s.
And what about service levels? Saturday deliveries will be canceled by current management as part of money-saving plans. More could follow if he took control.
In addition, it was only after a campaign by this newspaper that Royal Mail made concessions to people who would be saddled with stamps they could not use early next year.
Whether the company would be receptive to its Kretinsky-owned customers in the future is an open question. These things disturb the little people, but it seems unlikely that they will touch Kretinsky’s consciousness. He and Kellnerova can repair to the Chateau du Marais, a French chateau known as “little Versailles” just southwest of Paris, to escape the cares of the world. Kretinsky recently bought the enviable property for €43 million (£37 million) in a joint investment with the chief executive of an investment group owned by the Kellner family.
The plan is to turn it into a hotel, similar to a private resort that Kretinsky co-owns in the Maldives.
In her mid-twenties, Kellnerova is not a bad relationship in this pact. An accomplished horsewoman who competed in the Tokyo Olympics, she is also an heiress daughter of Petr Kellner, an associate of Kretinsky, who died in a helicopter crash while on a ski trip to Alaska.
Heiress: Rider Anna Kellnerova
Kretinsky is the son of a university professor and a judge. After law school, he joined J&T, a banking, finance and investment firm, primarily in Russia and Eastern Europe, in 1999. He made his fortune buying power plants through his energy company, EPH, the largest in Central Europe and a major player in the UK. It has invested over £2 billion here and owns several power stations, including Lynemouth in Northumberland. Elsewhere, Kretinsky has an interest in the American department store Macy’s, the French newspaper Le Monde and the Dutch postal group Post NL.
Of course, he has many oligarch-style baubles, including Heath Hall, a 65 million pound mansion in Hampstead, northwest London, and his name is in the Panama Papers — a cache of documents leaked in 2016 — in connection with a company in the British Virgin Islands called Wonderful Yacht Holdings.
Is he, one might ask, the sort of person who would put the interests of the British letter-writing public above his own monetary gain?
It has been suggested that he could split the business, sell Royal Mail’s traditional mail delivery arm and choose the much more lucrative international parcel delivery service. Kretinsky’s move comes at a fraught time for Royal Mail, which was privatized in 2013, when its shares were floated on the stock market for £3.30. They are now trading for around £2.40 – more than halved this year alone.
But the government, which had examined Kretinsky’s proposal to increase its stake under legislation designed to protect key national assets from damaging overseas takeovers, waved it off.
Have their eyes taken off the ball in the recent turmoil? The UK has seen three business secretaries since the summer when the review began. Approval was granted by Grant Shapps, following the departure of Jacob Rees-Mogg and Kwasi Kwarteng.
Does the Business Department really believe that a Czech billionaire is the right person to provide a sustainable, universal, affordable and secure postal service for the UK?
The government could and should block an entire offer from Kretinsky, if he launched one. And there is another possible line of defense: investor power. Royal Mail staff and private investors together own a 20 percent stake in the company. If Kretinsky makes a takeover bid, they must practice and mobilize shareholder democracy to vote him out.
Tycoon with a seat of £37 million in power
Daniel Kretinsky has amassed an eclectic array of assets and is a major player in the energy market.
The Czech billionaire’s energy company EPH – the largest in central Europe – is one of the largest independent producers in the UK, where he has invested more than £2 billion.
He owns several power stations, including one in Lynemouth, Northumberland.
‘Little Versailles’: Chateau du Marais, Kretinsky’s refuge near Paris, cost him and the Kellners £37 million
As well as owning more than a fifth of Royal Mail, he has another significant stake in the UK: a 10 per cent stake in Sainsbury’s, where he is the second largest investor.
Both are held by Vesa Equity, a private company registered in Luxembourg.
He has a 27 percent stake in West Ham United and is co-owner of Czech club Sparta Prague. Elsewhere, he has an interest in the American department store chain Macy’s, the French newspaper group Le Monde and the Dutch postal group Post NL.
He also appeared in the Panama Papers – a leaked cache of confidential documents – in connection with a company in the British Virgin Islands called Wonderful Yacht Holdings.
He recently bought Chateau du Marais, near Paris, for £37 million.
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