End of Saturday letters looms as Czech billionaire cleared to invest in Royal Mail

A billionaire Czech investor is expected to push for the end of Saturday letter deliveries and a renewed focus on parcels after ministers gave him licence to tighten his grip on Royal Mail.

Daniel Kretinsky, dubbed the “Czech sphinx” for his inscrutable approach to investing, will be free to increase his Royal Mail stake to more than 25pc after Grant Shapps, the new Business Secretary, ruled that this would not raise security concerns.

The announcement – which paves the way for Mr Kretinsky to buy enough shares for a takeover bid – was followed by explosive exchanges between the company and trade union leaders, who are now threatening a rolling wave of strikes to wreck deliveries over Christmas.

Mr Kretinsky is thought to be supportive of existing plans by Royal Mail executives to end Saturday letter deliveries following a dramatic decline in the amount of post sent. The change will require an act of Parliament, because Royal Mail’s obligations are enshrined in law.

The 500-year-old company wants to turn its attention to parcels instead, where it is struggling to compete with the likes of Amazon.

Unions are fighting broad efforts by the company’s board to force through a modernisation programme, and have already called repeated strikes.

In the hours that followed Mr Shapps’ decision, Royal Mail offered a new pay deal in the hope of breaking the deadlock.

Bosses offered a 9pc pay rise over the next two years, including a 7pc salary increase and 2pc lump sum payment.

The offer comes with strings attached, however, with union leaders told they must agree to a “programme of change” that includes seven-day-a-week parcel deliveries, as well as cuts to sick leave and longer shifts during the busy winter period.

The Communication Workers Union (CWU) responded angrily, accusing Royal Mail of a “declaration of war on posties”.

Union bosses at the CWU are due to meet on Tuesday to decide how to respond to the announcement, with a source saying that further industrial action is likely.

They said: “You could now see rolling strikes all the way to Christmas.

“Our members are up for it.”

Kwasi Kwarteng, the former business secretary, launched an inquiry into Mr Kretinsky’s stake-building through his investment arm Vesa earlier this year under the National Security and Investment Act of 2021. It currently owns 22pc of Royal Mail and is the company’s biggest shareholder.

Mr Shapps’ decision comes just weeks after a similar review was dropped into media tycoon Patrick Drahi’s interest in BT.

A spokesman for Vesa said that it welcomed Mr Shapps’ decision and “reiterate[d] our commitment to continuing long term investment presence in the UK, including our partnership with Royal Mail”.

Vesa is the second-largest investor in Sainsbury’s. Mr Kretinsky’s diverse business interests also include a stake in Premier League football club West Ham United as well as Le Monde newspaper. 

He originally made his fortune buying up out of favour coal and gas-fired power plants during the last 15 years.

Asked what Mr Shapps’ decision meant for the Czech billionaire’s plans to increase his stake in Royal Mail, a source close to him said last night: “We certainly have the opportunity to increase our share. On the other hand, we don’t have to.”