Czech Sphinx ‘very serious’ about bid for Royal Mail

THE Czech billionaire circling Royal Mail is “very serious” about a takeover, a source close to negotiations has said, as the postal service prepares to mount a defence.

Daniel Kretinsky, the investor known as the “Czech Sphinx”, is expected to table an improved offer for Royal Mail’s parent company International Distribution Services (IDS) after his initial £3.1bn bid was rebuffed. The board of IDS is understood to be bracing for a fresh approach and preparing a defence.

A source said Mr Kretinsky’s initial approach to the 500-year-old postal service had been interpreted as an effort to drum up interest from other shareholders. He is expected to make a fresh swoop before a deadline of May 15 imposed under City takeover rules.

Royal Mail will meet investors next week to discuss the approach, which it has branded “opportunistic”. One shareholder described Mr Kretinsky’s 320-per-share bid as “insulting”, telling the “The offer is an absolute joke.”

Red Wheel, one of IDS’s largest investors, has previously signalled it would back a takeover bid and said the group’s parcel business GLS alone was worth 350p per share.

Royal Mail is working with Goldman Sachs’s Mark Sorrell, son of advertising tycoon Sir Martin Sorrell, alongside bankers at Barclays and Bank of America to prepare its defence.

Bosses are understood to be keen to emphasise the postal service is at an inflection point as it pushes through a turnaround plan for its letters business.

Mr Kretinsky is already the largest shareholder in IDS with a holding of 27.5pc through his company EP Group.

But his efforts to take full control of the business are likely to prove controversial, given Royal Mail’s critical role in British life.

Royal Mail declined to comment.