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Business secretary Kemi Badenoch is reportedly set to meet with EP Group owner Daniel Kretinsky next week, as the man known as the Czech Sphinx looks to woo the government over his acquisition of Royal Mail owner IDS.
Talks have been tentatively scheduled for the middle of next week, according to inside sources cited by Sky News.
International Distributions Services (IDS), the owner of Royal Mail, last week agreed a £3.6bn takeover by Kretinsky’s EP Group, valuing the business at just above £5.2bn.
It will undergo scrutiny under the National Security and Investment Act although the government has said it has no fundamental objections.
Chancellor Jeremy Hunt has said any foreign takeover bid for Britain’s Royal Mail would be subject to “normal” national security scrutiny but it would not be opposed in principle.
Jonathan Reynolds, Labour’s shadow business secretary, has welcomed assurances that Royal Mail will “retain its British identity and safeguard its workforce with no compulsory redundancies. Labour in government will ensure these are adhered to.
Kretinsky has already made a series of commitments to reassure the government, with ‘safeguards’ on job losses, UK tax residency and keeping the Royal Mail brand.
He has also said he will pursue the same universal service obligation (USO) reforms that Royal Mail is chasing in order to modernise its services, which it says are currently unsustainable.
The City still seems somewhat doubtful of the deal, with shares trading south of the 370 pence per share offer price. Some analysts have said the deal could get hung up by regulatory barriers, while others think it may be in the government’s best interests to wave it through.
Kretinsky, who would become the first foreign owner of Royal Mail, also owns part of Westham United Football Club.
Royal Mail was privatised in 2013 by the coalition government at the time.
The Department for Business and Trade and EP Group have both declined to comment.
