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Kemi Badenoch is to meet the Czech billionaire plotting a £3.5bn takeover of Royal Mail as she seeks assurances over the sale of a key British asset to a foreign investor.
The Business Secretary will call a meeting with Daniel Kretinsky to set out her expectations around the deal should he make a firm offer.
Mr Kretinsky, nicknamed the “Czech sphinx”, has put forward a possible £3.5bn bid for the 500-year-old postal service, in which he is already the largest shareholder.
The board of parent company International Distributions Services (IDS), which rejected an earlier approach, has said it is minded to accept the improved offer. Mr Kretinsky now has until 5pm on May 29 to make a firm bid or walk away.
However, any deal will be subject to undertakings from Mr Kretinsky to both Royal Mail and ministers given the highly sensitive nature of the company.
The tycoon has agreed to maintain Saturday deliveries for first class letters and keep the one-price-goes-anywhere service.
He has also vowed to maintain employees’ current rights, protect the Royal Mail brand and keep the company’s headquarters and tax base in the UK.
In a meeting with IDS chief executive Martin Seidenberg on Thursday, Ms Badenoch welcomed the undertakings but said the details of these would ultimately be for the Government to consider and agree.
The Business Secretary also emphasised the importance of Royal Mail in British society, adding that the Government’s priority was to maintain that position.
Ministers may call for guarantees that the Czech sphinx will not break up the business.
His swoop has sparked speculation that he could look to split off the profitable GLS parcels business from the struggling letters division and merge it with PostNL, in which he also owns a major stake.
Mr Seidenberg is also understood to have used the meeting, which was arranged before Mr Kretinsky’s takeover bid emerged, to lobby for reform of Royal Mail’s universal service obligation (USO).
The company has submitted proposals that would see second class letters delivered just three times a week, while the six-day service would be maintained for first class post.
Ofcom is currently consulting on the USO and is due to provide an update in the summer. However, the Royal Mail boss has hit out at the regulator for its lack of urgency and urged it to approve the changes as soon as possible.
Ms Badenoch on Thursday reiterated the Government’s stance that the universal service must meet customer needs, including those of vulnerable people, those in remote communities and small businesses.
The latest offer from Mr Kretinsky’s EP Group valued IDS at 370p per share – or roughly £3.5bn. It marks an increase of almost 16pc on its previous 320p per share approach, which was rejected.
While Royal Mail’s board has said it is minded to accept the bid, it will continue to hold discussions with EP Group over the scope and duration of the undertakings.
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