Czech’s in the Royal Mail

One scoop to start: Jane Street’s quarterly trading revenues have surged to their highest level since the start of the pandemic, as the secretive high-speed firm flourished alongside traditional Wall Street market makers. It expects its first-quarter net trading revenue will be roughly $4.4bn, more than double the level it achieved a year prior.

And a WeWork update to start: Adam Neumann has made a fresh push to regain control of WeWork even as the co-working pioneer races to raise hundreds of millions of dollars to emerge from bankruptcy and avoid a sale, according to two people familiar with the matter.

In today’s newsletter:

• Royal Mail becomes a target

• Elon Musk’s new payday play

• China’s law firms go global

Czech billionaire Křetínský eyes buying Royal Mail

Daniel Křetínský clearly likes a bargain . . . and he’s on the hunt again. We learned on Wednesday that the Czech billionaire’s investment group made a £4.5bn takeover offer for Royal Mail’s owner International Distributions Services.

The bid comes as the postal business, of which Křetínský’s EP Group is the largest shareholder, has seen its stock slide in the last couple of years. Now, he’s made an offer for the whole thing — less than a year after he told The Sunday Times that he had no intention of bidding for the business.

Stop us if you’ve heard this one before: an iconic British company being pursued by a foreign bidder, and the country not knowing what to do about it (ahem, The Telegraph). That’s more or less the story we’re going to watch unfold over the next few weeks at Royal Mail.

The takeover offer already has a lot of big players involved. EP’s working with JPMorgan Chase, Citigroup and BNP Paribas, while Royal Mail’s owner is working with Goldman Sachs, Bank of America and Barclays.

Even though IDS rebuffed the bid (it called the timing “opportunistic”), shareholders seem to be taking it seriously, with the Royal Mail owner’s stock price rising nearly 29 per cent on Wednesday.

We’ve been following the lawyer-turned-energy tycoon, also known as the “Czech sphinx”, for years. Křetínský basically came out of nowhere, as he quietly built a fortune in the energy sector.

In the past few years, he’s amassed a business empire by scooping up troubled assets across western Europe. And now, it looks like Royal Mail is the latest to fit the bill.

In September, Křetínský sat down for a lengthy interview with DD’s Arash Massoudi, where he talked about his investment philosophy and how he didn’t want to pay outsized prices for “trophy” assets.

The Czech billionaire’s interest comes just as the postal business finds itself in a tough spot. It’s still the market leader for the UK’s fast-growing parcels delivery business, but it faces tough competition from rivals like Amazon Logistics.

His bid for Royal Mail is just the latest in a series of deals. Křetínský’s bought stakes in supermarket chain J Sainsbury and London football club West Ham United. Those firms may want to be on watch themselves, as we’ve now seen that a Křetínský stake can quickly lead to a takeover offer.

Last year, he agreed to bail out French food retailer Casino. And there have been other interests, including Telegraph Media Group.

Křetínský’s investment group said Royal Mail was in a “challenging situation” and under “unsustainable pressure”. In other words, a perfect target.

Musk’s second swing at $48bn

Elon Musk might get his bumper payday after all.

Tesla’s board is asking investors to vote at its June annual meeting on a deal that could hand Musk shares worth $48bn, as well as the decision to shift the electric-car maker’s incorporation to Texas.

The original 2018 share incentive package — worth $56bn — was struck down by a Delaware court because, it deemed, Tesla’s board was not sufficiently independent to verify it.

Yet Tesla’s shareholder letter sets out (in more than 40 pages of painstaking detail) the circus-worthy contortions performed by the board to independently unearth a rational justification for moving the company’s incorporation from Delaware to Texas.

Within days of Musk polling X users on a decision to move to Texas, the board convened a meeting — Musk and his brother Kimbal Musk were excluded — where it decided to form a special committee to study the benefits of relocation.

“Redomestication is a board decision, not a decision for a chief executive officer,” the shareholder letter gravely states.

The committee “initially considered all US states as well as the possibility of incorporating outside of the US”, before drawing up a 10-state shortlist — California, Delaware, Florida, Maryland, Nevada, New York, Ohio, Pennsylvania, Texas and Virginia — that was later narrowed to five, then finally to two: Delaware and Texas.

Still, there was almost nothing to choose between Texas and Delaware, with “no convincing evidence” that shifting would affect the market capitalisation at all.

Eventually, the independent board committee reached for an endorsement based on optics.

“Fully becoming a Texas company would send a strong signal of Tesla’s commitment to the state and local community that have done so much for it already, and that are so important to Tesla’s future.”

Musk said jump: the board asked “how high?”

China’s ‘red circle’ law firms go after rivals abroad

Some of China’s top law firms are increasing their presence in foreign markets.

At least eight of the biggest law firms from the Chinese mainland have opened offices in Asia and the US since the start of last year — and there are more in the works.

The country’s top firms are collectively known as the “red circle” — a play on London’s “magic circle” — and their lawyers are sometimes willing to work for fees half those of their western rivals.

While still high by many standards, those cheaper fees weigh on the firms’ revenues. The eight that have expanded abroad in the past year had combined annual revenues of less than $3bn in 2022. By comparison, Kirkland & Ellis in the US alone reported $6.5bn in the same period.

Jingsh Law Firm, which is one of the highest-grossing firms in China, has unveiled plans to set up offices in South Korea and Japan this year. In December, Han Sun Law Offices opened a New York outpost, months after setting up in Singapore. DeHeng Law Offices landed in Laos last year, while Yingke Law Firm opened an office in South Africa.

Such overseas outposts still mainly serve Chinese clients. But Alan Xu, a managing partner at Zhong Lun, a top-10 mainland firm that has over the past decade opened offices in the US, UK and Japan, said that was changing.

“Chinese law firms are rapidly evolving and increasingly competing in these areas by hiring experienced lawyers from international firms and expanding their international presence,” Xu said.

The push abroad comes as some international firms retreat from the mainland and Hong Kong, with slowing economic growth dampening the country’s once bullish business trajectory.

But for Chinese firms to challenge the Kirklands of the world — at least in revenue — there’s still a long way to go.

Job moves

• Houlihan Lokey has hired David Gadmer in Paris to lead a new initiative to advise governments on sovereign-debt difficulties, Bloomberg reports. He previously worked at Lazard.

Smart reads

Peltz’s sequel Billionaire Nelson Peltz lost big in his battle against Disney. Now he’s trying to restore the magic inside his activist hedge fund as it tussles with Unilever, The Wall Street Journal reports.

CNN boss Mark Thompson transformed a legacy newspaper into a digital-first media group as chief executive of The New York Times. Now he’s preparing to revamp CNN amid an era of cord-cutting and partisanship, the FT writes.

Saudi ambitions Larry Fink has bet big on making the world’s largest asset manager a player in private infrastructure. He’s staked much of BlackRock’s success on courting investment from Saudi Arabia, Bloomberg reveals.

News round-up

Push to crack down on TikTok gains momentum in US Congress (FT)

Liontrust hit with £4bn in outflows from UK funds (FT)

UBS plans next round of lay-offs in Credit Suisse integration (Bloomberg)

Abu Dhabi’s Taqa opens door to bid for Spanish utility Naturgy (FT)

Saudi’s Neom hunts for more cash for $1.5tn desert city (Bloomberg)

Boeing engineer says safety concerns are ignored inside plane maker (FT)