The surrender of the board of Royal Mail owner International Distribution Services (IDS) to the blandishments of Czech billionaire Daniel Kretinsky is a national disgrace.
An IDS board, packed with the great and the good, including chairman Keith Williams and senior independent director Sarah Hogg, should have fought this farce.
You are betraying the heritage of one of the country’s most revered institutions, whose history dates back to 1635.
What is more worrying is that it is bad business and bad for Britain. The track record of former utilities falling into the hands of indifferent and financially motivated owners has been disastrous.
The same public that so abhors the ownership structure of Thames Water, where billions of pounds in dividends and interest payments flowed overseas, cannot view developments at Royal Mail with equanimity.
At risk: The £3.6bn deal with Royal Mail will be paid for by putting a portion of the debt on IDS’s balance sheet. The consequence of this will be a huge interest bill and a rush to get rid of assets.
The £3.6bn deal by Kretinsky’s EP Group will be paid for by putting a portion of the debt on IDS’s balance sheet.
The consequence of this will be a huge interest bill and a rush to offload assets, including profitable European parcel arm GLS.
A debt burden can only lead to reduced investments and the company becoming less competitive.
Supermarket groups Morrisons and Asda have retreated since falling under private equity control.
The IDS board of directors will wave in the air a series of commitments made by Kretinsky as a guarantee that core values and union contracts will be respected. Oh!
In private hands and operating behind closed doors, with no formal scrutiny from stakeholders, Kretinsky and his supporters will have license to do whatever they want, especially when the five-year commitments disappear.
Enforcement of such agreements, even if regulators take legal action, always comes too late.
As alarming as the cowardice of a low-octane IDS board is the attitude of our indolent politicians. There is a curious complacency in their desire not to be seen as interfering in free markets.
The indifference of politicians was responsible for the loss of Arm Holdings in New York. A focused board saved AstraZeneca, now one of the country’s most valuable companies, from being taken over by rival Pfizer.
When I first broached the potential sale of Royal Mail with Chancellor Jeremy Hunt in Washington last month, he didn’t seem very enthusiastic. In fact, he still insists that it will have to be examined for national security reasons.
The Conservatives have originated the National Security and Investment Act and, if they were still in government, could have stopped this deal in its tracks.
My fear is that it will go unnoticed in the elections. Kretinsky’s team has been busy cajoling the Labor Party.
The party’s naive business spokesman, Jonathan Reynolds, insists that a Labor government will ensure that the Czech billionaire’s assurances will be obeyed.
There is not a single cat in hell.
The Labor Party should now make clear that it will not tolerate such a transaction.
He cannot be in favor of returning the railways to state ownership, due to alleged mismanagement, and at the same time selling the Royal Mail. If Keir Starmer is really the patriot he says he is, he now has the chance to prove he says so on Serious.
Rishi Sunak has a unique opportunity to show that Britain, like the United States and France, is willing to repel foreign marauders.
Star Chambers
All is forgiven. Anglo American chairman Stuart Chambers has shown courage in resisting the attack by Australia-based BHP.
What is even more impressive is that it has done so in the face of Blackrock’s insistence to continue talking and in the face of a falling share price.
Anglo’s greatest ally in defending the kingdom has been South Africa throughout almost a century of corporate history, including bold behavior in the apartheid era.
In particular, it will be much more likely to divest its listed subsidiaries Anglo Platinum and Kumba Iron Ore than BHP, which would have faced considerable regulatory and tax hurdles.
London-listed Anglo must now prove that its go-it-alone strategy works.
It is best to wait for a prompt release of iron coking coal. Several buyers, including Glencore, are behind the scenes. A sale would be an early and compelling victory for Chambers, CEO Duncan Wanblad and investors.
