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International Distributions Services plc, the owner of Britain’s 500-year old postal service and courier company Royal Mail, has agreed to a takeover offer by EP Corporate Group, owned by Czech billionaire Daniel Kretinsky.
The total deal value is around 3.568 billion pounds on a fully diluted basis, while enterprise value is 5.284 billion pounds for the country’s one of the most iconic institutions.
Following the news, Royal Mail parent’s shares grew 4.11 percent on the London Stock Exchange, trading at 334.40 pence.
EP UK Bidco Limited, a newly formed company owned by EP Corporate Group, and J&T Capital Partners will acquire IDS, excluding shares owned or controlled by VESA Equity Investment S.a r.l.
EP Corporate is a 100% direct shareholder of VESA Equity which holds about 27.6% stake in IDS.
As per the deal terms, the shareholders of IDS, which comprises Royal Mail and delivery business GLS, will receive 370 pence per share. This includes a cash consideration of 360 pence per share, a fiscal 2024 final dividend of 2 pence per share, and a special dividend of 8 pence per share.
However, if the acquisition does not become unconditional, there will be no special dividend. Final dividend, if approved, is expected to be paid on September 30 to IDS shareholders on the register on August 23.
The purchase price represents a premium of about 72.7% to the closing price of 214 pence on April 16, 2024, the last business day before the commencement of the offer period.
Royal Mail was established in 1516 by Henry VII as a postal service exclusively for the King and his Court. Later, Charles I opened the service to the general public in 1635. Since 2013, the service has been a public listed company as a subsidiary of IDS.
VESA, the private investment arm of EP, has been a substantial shareholder in the firm since 2020. For both VESA and EP, IDS is a strong business with solid foundations despite significant challenges. According to them, IDS has the potential to become a major postal logistics groups in Europe, with successful transformation, modernisation, investments in out-of-home solutions and the return to a growth trajectory both in revenue and market opportunity.
Kretinsky, founder and chairman of EP, said, “IDS, and Royal Mail in particular, form part of the national infrastructure of the countries they operate in. More than that, Royal Mail is part of the fabric of UK society and has been for hundreds of years. The EP group has the utmost respect for Royal Mail’s history and tradition, and I know that owning this business will come with enormous responsibility – not just to the employees but to the citizens who rely on its services every day.”
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