A Czech billionaire’s takeover of Royal Mail has been approved by ministers, it was reported last night.
It means the British postal service, which traces its lineage to Henry VIII, will fall under foreign ownership for the first time in its more than 500-year history.
The BBC said Daniel Kretinsky, already the largest shareholder in Royal Mail’s parent company International Distribution Services, will be allowed to proceed with his £3.6bn takeover of the group following a national security assessment.
But the UK Government will reportedly retain a “golden share” in the business, meaning it will need to approve any major changes to Royal Mail’s ownership in the future, as well as the location of its headquarters and tax residence.
Kretinsky, known as the Czech Sphinx due to his low profile, also agreed to commitments including that staff will receive 10 percent of dividends paid by the company, as well as the formation of a workers’ group that will meet every month. with the company’s bosses to give officials a greater say in how it is run.
This follows previous promises made by the billionaire to maintain Royal Mail’s single-price Universal Service Obligation (USO), which requires it to deliver letters six days a week, Monday to Friday.
Czech billionaire’s takeover of Royal Mail has been approved by ministers, as reported last night
The BBC said Daniel Kretinsky (pictured), already the largest shareholder in Royal Mail’s parent company International Distribution Services, will be allowed to proceed with his £3.6bn takeover of the group.
It also agreed not to touch the surplus in the company’s pension scheme and to maintain the Royal Mail brand and its headquarters and tax residence in Britain for the next five years.
The Cabinet Office has been contacted for comment. The Department of Business and Commerce declined to comment on the report.
Royal Mail will add another famous name to Kretinsky’s growing list of British assets.
The tycoon, who made his fortune in the European energy sector, owns a large stake in the West Ham United football club, as well as a share in the Sainsbury’s supermarket chain.
It pounced on Royal Mail earlier this year with its multi-million pound bid, having previously built up a nearly 28 per cent stake in parent company IDS over several years.
Its takeover of the British postal service has proven highly controversial and was requested for review by ministers due to Royal Mail’s vital role in the UK’s national infrastructure.
Royal Mail to add another famous name to Kretinsky’s growing list of British assets
Kretinsky pounced on Royal Mail earlier this year with his multi-million pound bid, having previously built up a nearly 28 per cent stake in parent company IDS over several years.
However, Kretinsky (whose net worth is estimated at £7bn) appeared to have won a ministerial round last month when Business Secretary Jonathan Reynolds branded Kretinsky a “legitimate business figure”, despite the billionaire’s ties to Russia through his previous businesses.
Its impending takeover of the business comes at a difficult time for Royal Mail, which has reported losses of hundreds of millions of pounds in recent years as it struggles to improve its service levels.
Last week, it was fined £10.5m by communications regulator Ofcom for failing to meet its first and second class mail delivery targets.
This has led to multiple complaints from customers, some of whom say that even important letters such as doctor appointments and legal documents arrive late.
Royal Mail has also been calling for the USO to be amended, arguing that the sharp decline in the number of letters being sent has made the legal requirement a huge waste of money for the business.
The OSU is currently under review by Ofcom.
Instead, the company wants to focus more on package deliveries, which are more profitable and in growing demand as more people shop online.