Daniel Kretinsky to meet union chief over future of Royal Mail

The billionaire would-be owner of Royal Mail will meet the leader of the postal workers’ union for the first time this week in what is likely to be a stand-off over the future of the nationwide parcels and letters delivery group.

Almost two months after the board of International Distribution Services, Royal Mail’s parent company, recommended a £3.6 billion takeover by interests controlled by Daniel Kretinsky, the Czech energy tycoon is scheduled to meet Dave Ward, general secretary of the Communication Workers Union, on Tuesday.

Kretinsky has conceded that he would struggle to succeed with his bid if Royal Mail’s 130,000-strong workforce, the vast majority of which is represented by the union, opposes him.

The meeting is unlikely to reach an accord as Kretinsky is understood to have rejected out of hand the union’s proposals to create an employee “collective trust”. This would hold a stake on behalf of the workforce and would have a say in the governance of the business. It was supported in the Labour government’s election manifesto.

In takeover filings last month, the offer document stated that Kretinsky, 49, was “exploring, following completion of the acquisition, potentially offering a form of employee participation model in the business, including, without limitation, by way of a profit-sharing mechanism, to all employees”.

However, that and a guarantee only to the end of next year that there will be no compulsory redundancies at Royal Mail are known to fall well short of the pledges that the Communication Workers Union is attempting to secure.

The Times revealed last month that Ward, 65, wants to open negotiations on the creation of an employee collective trust if the union is to support Kretinsky’s takeover. Kretinsky is believed to regard such a vehicle as an “abstract structure”. While he says that he is prepared to countenance a profit-sharing mechanism with employees of the lossmaking Royal Mail, it is understood that he is not willing to offer a collective shareholding for the workforce or to give them any rights over the governance or management of the company.

The meeting is set to take place at Royal Mail’s Mount Pleasant sorting facility in London.

After preparatory meetings with Kretinsky’s representatives, Ward said: “We laid out our concerns that the offer of contractual obligations are not broad enough, do not go on for long enough and aren’t strong enough. We made it clear we are looking for the safeguards that the workforce want.”

The union has no formal mechanism to stand in the way of a takeover of Royal Mail, but it is a powerful voice in the Labour Party.

Even if shareholders in International Distribution Services agree a deal, the final decision will rest with the government. Ministers have the power to block takeovers of strategically important companies and assets under the National Security and Investment Act.

That decision nominally rests with Jonathan Reynolds, the business secretary, although in reality it will be the decision of Sir Keir Starmer and Rachel Reeves, the chancellor.

The new government was elected on a manifesto that stated: “Labour will explore new business and governance models for Royal Mail so that workers and customers who rely on Royal Mail services can have a stronger voice in the governance and strategic direction of the company.”

Shares in International Distribution Services closed at 343¼p on Friday, below the offer price of 360p plus 10p in dividends. Nevertheless, it is significantly ahead of the 214p a share that the stock had plumbed before the news in April that Kretinsky was preparing an offer.

Kretinsky’s interests already own 27.6 per cent of the group. His offer needs the support of 75 per cent of shareholders, or a little under two thirds of the shares that he doesn’t already own.