A Royal Mail truck drives through the Royal Mail Center in Warrington.
Nathan Stick | Getty Images
Royal Mail parent company International Delivery Services said on Wednesday it had agreed to a formal takeover bid of 3.57 billion pounds ($4.55 billion) from Czech billionaire Daniel Kretinsky.
The acquisition values IDS, which owns Royal Mail and international parcel network GLS, at 370p a share.
“The IDS board has negotiated a far-reaching package,” chairman Keith Williams said in a statement.
It includes the provision of “one-price universal” services
obligations, maintaining employee benefits and pensions and ensuring Royal Mail’s headquarters and tax residence remain in the UK, he added.
Kretinsky said: “The scale of our commitment to the company and the UK government reflects the seriousness with which we take this responsibility, which benefits IDS employees, union representatives and all other stakeholders.”
Royal Mail has been trying to transform itself into a parcel-led business as letter volumes have fallen sharply for years.
Kretinski said private investment was vital for Royal Mail given the challenging situation of poor service quality, slow transformation and increasing competition.
Treasurer Jeremy Hunt earlier said any takeover bid for Royal Mail would be subject to “normal” national security scrutiny but would not be opposed in principle.
The opposition Labor Party said in a statement earlier this month that the party’s Jonathan Reynolds had written to Kretinski seeking safeguards, including that Royal Mail remain domiciled and headquartered in the UK and pay taxes there.
The UK national election will be held on July 4th.
Kretinsky’s investment vehicle EP Group earlier this month raised its bid for shares IDS doesn’t already own to 370 pence a share, after the London-listed company rejected a 320 pence bid in April.
VESA Equity owns approximately 27.6% of Kretinsky’s IDS shares. EP is 100% shareholder of VESA Equity.
Last week, IDS reported a narrower annual pre-tax loss and announced a special dividend.
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