Czech Sphinx swoops on troubled Royal Mail

Billionaire launches £3.2 billion bid for 508-year-old postal service

A BILLIONAIRE dubbed the ‘Czech Sphinx’ has launched an audacious swoop on Royal Mail that could see the 508-year- old postal service fall into foreign hands.

Daniel Kretinsky, who co-owns West Ham United and has a stake in Sainsbury’s, has already seen an opening bid worth £3.2bn rejected.

But the tycoon, 48, is now working on a new offer for International Distributions Services (IDS), the owner of Royal Mail.

A deal would see Royal Mail taken into foreign ownership for the first time since it was established by Henry VIII in 1516, a prospect likely to spark furious opposition from unions, Westminster and the public.

Analysts said any takeover could be blocked by the Government.

The swoop comes as Royal Mail, one of Britain’s oldest companies, is in crisis as it struggles to keep up with parcel couriers such as Amazon.

The company wants to reform the universal service obligation, which means it must deliver letters six days a week nationwide for the fixed price of a stamp.

It is also hoping to reduce secondclass deliveries to every other weekday.

Royal Mail said it delivers 7bn letters a year, down from 20bn a decade ago.

That level is expected to drop to around 4bn in the next five years. Meanwhile, it has faced a backlash for hiking the cost of a first- class stamp to £1.35 – the fourth rise in just two years.

It comes amid complaints over delivery delays last year and mass strike action in 2022.

Shares surged 29pc, or 61.8p, to 276p yesterday after Kretinsky’s announcement but were still languishing below the 330p mark that they floated at in 2013.

Kretinsky, who owns a 27.56pc stake in IDS, said yesterday his EP Group made an offer for the rest of the company’s stock on April 9.

IDS said the 320p per share offer ‘significantly undervalues IDS and its future prospects’.

In a statement, the company said: ‘The board believes the timing of the proposal is opportunistic. It does not reflect the growth potential and prospects of the company.’

Kretinsky is working on an improved bid, Reuters reported, and has until Wednesday, May 15 to make a firm offer under UK takeover rules. Dan Coatsworth, investment analyst at AJ Bell, said: ‘The proposal has been rejected but it once again shines the spotlight on the UK market as a veritable feast of bargains on offer.’

Ministers allowed Kretinsky to up his stake in Royal Mail stake when it breached the 25pc threshold in 2022.

But a leading analyst, who asked not to be named, said that clearance under the National Security and Investment Act would be required for a full takeover.

‘Ironically, a precedent was set back in 2022 when Kretinsky requested pre-approval to raise his stake above 25pc,’ they said.

‘The Government chose to not block that. But a full takeover would be a different matter.’

A Communication Workers Union spokesman said: ‘The truth is, handing over the ownership of one of the UK’s most prestigious institutions to a foreign equity investor cannot be right.

‘ But neither is the current model or direction of the company.’

AJ Bell’s Coatsworth said: ‘The Government might also want to know what’s going on, given Royal Mail’s crucial role in the distribution of information to consumers and businesses.’

The Department for Business and Trade declined to comment yesterday.