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LONDON, April 17 (Reuters) – Czech billionaire Daniel
Kretinsky has been exploring a possible bid for the owner of the
UK’s Royal Mail, which has seen its market value fall to 2.1
billion pounds , two people familiar with the
matter told Reuters.
Kretinsky, the largest shareholder in Royal Mail’s
London-listed parent International Distributions Services
(IDS), has been working with advisers informally in
recent months to consider taking over the company, one of the
people said.
Deliberations are in the early stages, the person said,
cautioning there is no certainty Kretinsky will decide to go
ahead with an offer.
Kretinsky holds a 27% stake in IDS via investment vehicle
VESA Equity Invesment that he founded in 2018 with business
partner Patrik Tkac, which also has a stake in J Sainsbury
and Foot Locker, according to VESA’s website.
VESA declined to comment.
IDS comprises two businesses, including international
parcels network General Logistics Systems (GLS,) based in
Amsterdam, and the Royal Mail business in the UK.
Royal Mail has faced hurdles over the last couple of years
with strikes by postal workers, a cyber security incident, a
fine from regulator Ofcom for missed delivery targets as well as
losing a 360-year monopoly to deliver parcels from post office
branches.
Any bid by Kretinsky for one of the world’s oldest postal
firms would follow a buying spree in Europe, including of
indebted French supermarket group Casino last year, as well as
attempts to buy half of Thyssenkrupp’s steel business and Atos’s
loss-making IT services unit.
The UK has seen an uptick in approaches for its
London-listed companies, which have struggled with low
valuations.
The Sunday Times in May 2023 reported that Kretinsky told
the paper that he had no intention of bidding for Royal Mail and
it was beneficial for the company to remain listed.
A deal could trigger an intervention from the British
government under the terms of the National Security and
Investment Act, which gives ministers a greater say over deals
involving critical infrastructure.
The Department for Business, Energy and Industrial Strategy
(BEIS) in 2022 reviewed VESA’s plans to increase its about 22%
stake in the company at the time to more than 25%.
Shares in IDS have fallen by two-thirds from its most recent
peak of 571p in June 2021 to open at 213p on Wednesday.
IDS said revenues grew by 3.8% to 9.45 billion pounds for
the 9 months ending in 2023, according its quarterly update in
January. It expects to make an operating profit in the second
half of this year that would offset the 169 million pound loss
in the first half.
($1 = 0.8021 pounds)
(Reporting by Amy-Jo Crowley, Emma-Victoria Farr and Marek
Strzelecki. Additional reporting by Jan Lopatka. Editing by
Anousha Sakoui)
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