Czech Sphinx turns Russian gas into a bid for Royal Mail Daniel Křetínský’s bet on fossil fuels paid off as war in Ukraine sent prices soaring, writes James Warrington

‘It is impossible for our preferred low-profile scenario to continue’ ‘I don’t think they’re going to have anything against him personally or as an individual’

On the sidelines of the World Economic Forum in Davos earlier this year, Daniel Křetínský was targeting Britain’s future power brokers.

The billionaire, known as the “Czech Sphinx”, met with shadow business secretary Jonathan Reynolds as part of a bid to charm senior Labour officials.

Not only did the meeting represent a shift in the political winds, but it also emphasised Křetínský’s deepening influence across Britain.

After building an energy empire from the ashes of communist Czechoslovakia, the tycoon has taken a growing interest in UK companies in recent years, with investments in Sainsbury’s and West Ham United Football Club.

Yet it is his stake in Royal Mail that has attracted the most headlines.

Earlier this month, Křetínský had a £3.1bn takeover offer rejected for the business and he is now regrouping for a fresh approach.

Unsurprisingly, his bid to acquire the 500-year-old postal service has provoked opposition from politicians and unions alike – although Křetínský is hopeful that now is the best time to swoop.

“In terms of timing, there may be an element of ‘now or never’ to the takeover approach,” says Gerald Khoo, an analyst at Liberum.

Born in the Czech city of Brno to middle-class parents – his mother was a judge and his father is still a professor – Křetínský owes much of his business acumen to his childhood under communism.

The 48-year-old has cited his time growing up during the Velvet Revolution, as the overhaul of Czechoslovakia’s communist government is known, as a driving force behind his love of free markets.

Křetínský trained as a lawyer before joining Slovakian investment group J&T in 1999, where he made his name as a dealmaker.

His business interests have since expanded through his holding company EP Group, which owns his UK investments, as well as a 30pc stake in Dutch postal operator Postnl and his controlling stake in French supermarket giant Casino.

Until last year, the billionaire also held a stake in the French newspaper

Le Monde – an investment that created controversy among journalists.

However, underpinning his wealth are investments in fossil fuels, which have helped him build an estimated net worth of $7.1bn (£5.7bn). In 2009, J&T spun off its energy assets into a new company, EPH. Křetínský became chairman and took a majority stake.

Since then, the tycoon has embarked on an acquisition spree, snapping up assets from the likes of British Gas owner Centrica and Eon. EPH is now the largest Czech company by revenue.

At the heart of this strategy was a savvy bet that Europe would remain heavily reliant on polluting fossil fuels despite ambitious targets to transition to net zero.

As most major energy companies began to divest their unfashionable fossil fuel operations, Křetínský chose to double down on oil and gas.

EPH is now one of the largest polluters in Europe, stemming largely from its ownership of Germany’s second-biggest coal miner. The strategy has earned Křetínský a second nickname among Czech environmental groups – the “Fossil Hyena”.

As for Křetínský’s UK energy assets, he currently owns the Langage and South Humber Bank gas plants and the Lynemouth biomass plant in Northumberland.

However, it is arguably his stake in Slovakia’s Eustream pipeline, which is the largest transporter of Russian gas to Europe, that has proved most controversial. This has allowed Křetínský to cash in on soaring gas prices in the aftermath of Russia’s invasion of Ukraine, with the squeeze on European energy supplies also forcing many countries to slow their net zero plans and return to dirtier sources of fuel.

Barring the purchase of a €43m (£37m) château near Paris in 2022, Křetínský is a relatively understated tycoon, driving an Audi and using a Samsung smartphone.

Jérôme Lefilliâtre, a French journalist who interviewed Křetínský in 2019, told Bloomberg the billionaire was “not a rowdy vodka guy”.

This approach, combined with a reluctance to speak publicly about his investments, has allowed Křetínský to fly largely under the radar and earned him his sphinx nickname.

But there are signs that this is starting to change. In a rare interview last year, Křetínský admitted it was “impossible for our preferred lowprofile scenario to continue”.

As the investor pursues more high-profile takeovers away from energy, it is inevitable that the veil of secrecy will start to come down. At the forefront of this is his bid for Royal Mail. While an initial £3.1bn offer was rejected last week, analysts say this was likely an attempt to drum up shareholder support and they expect him to return with a higher bid.

Yet in circling a critical British asset, Křetínský is likely to draw fierce political scrutiny. His previous move to increase his stake in Royal Mail to more than 25pc in 2022 was reviewed on national security grounds, and any takeover bid is expected to trigger a similar investigation.

Sir Vince Cable, who oversaw the privatisation of Royal Mail in 2013, has also called for ministers to conduct a fit and proper person test if Křetínský should take ownership of the company.

While he is closely linked to Europe’s oil and gas industry, Křetínský has not been sanctioned and there is no suggestion his business helps to fund the Kremlin. “I don’t think they’re going to have anything against him personally or as an individual,” says one industry source. “The issue will be how comfortable are they that a unique piece of critical national infrastructure will be controlled by a single individual?”

As a listed UK company, Royal Mail is held accountable by its shareholders, as well as by broader public pressure from the Government and media.

Yet these checks and balances would lessen under private ownership, creating uncertainty over the future direction of a vital British organisation.

Křetínský’s success in energy is largely the result of his ability to ignore pressures that forced other public companies to offload unpopular fossil fuel operations.

Critics fear that should he take Royal Mail private, then he could adopt a similarly bold approach by taking a more hard-line stance against the unions.

As Křetínský looks to tighten his grip on British companies, he knows he must emerge from the shadows. But in a climate of growing scepticism towards foreign investments, the billionaire baron may face a tough time in the spotlight.