Labor has vowed to “vigorously examine” the Royal Mail takeover and give workers a “stronger voice” in a pre-election pledge that casts the deal into doubt.
In its manifesto, Sir Keir Starmer’s party promised to study the proposed £3.6bn sale of the 508-year-old postal service to a billionaire known as the “Czech Sphinx”.
Crucially, the Labor Party said it would explore giving workers more of a say in how Royal Mail is run.
The compromise appeared to cede ground to unions that were demanding that postal officials gain partial ownership through a collective employee trust. Analysts said this could come too close to nationalization for buyer Daniel Kretinsky and discourage him.
Share At the parent company, International Distribution Services, it fell almost 2% following the publication yesterday of Labour’s election manifesto.
Scrutiny: Billionaire investor Daniel Kretinsky (pictured), known as the Czech Sphinx, agreed to £3.6bn deal with Royal Mail
The price recovered by around 0.7 per cent, or 2.4 pence, to 329.6 pence, well below the offer price of 370 pence put forward by Kretinsky and accepted by the IDS board.
The gap suggests that many do not expect the deal to go through.
“It’s the market’s way of saying it believes there is even less chance of the acquisition being completed,” said Dan Coatsworth, an investment analyst at AJ Bell.
“Labour’s intention to allow workers and customers to have a stronger voice would give them almost the same rights as shareholders.”
He added: “Kretinsky might think we are too close to nationalization.”
‘No doubt Kretinsky wants to get Royal Mail out of the public spotlight so he can fix it without investors demanding constant updates.
“But Labour’s drawing up a list of demands because Royal Mail is a vital part of the UK’s infrastructure could effectively keep that spotlight shining.”
Kretinsky has promised to maintain the Royal Mail name and brand and retain its headquarters and tax residence in the United Kingdom to keep it linked to Britain.
But the Communication Workers Union, which represents about 110,000 workers, wants mail carriers to have a say.
Under a collective employee trust, workers would have a say in how the company is run and a share in its profits. It would also reduce the risk of strikes.
In an article in the Mail this week, CWU leader Dave Ward called for “a new ownership and governance model for Royal Mail”.
“Our plan will regain the trust of the public and businesses and win back tens of thousands of workers who have been demoralized by leaders by giving them a significant stake in their companies,” he said.
This week the Secretary of the Economy, Kemi Badenoch, would meet with Kretinsky.
It previously sought commitments from current management that Royal Mail’s universal service obligation would be protected.
The takeover could also be derailed under the National Security and Investment Act, but so far both Labor and the Conservatives have stopped short of threatening to block the deal.
Kretinsky has hinted that he would support management’s plans to reform the postal service, which include reducing second-class mail to three days a week.
