Government clears way for Czech investor to build stake in Royal Mail

Daniel Křetínský’s Vesa Equity already owns 22% of Royal Mail’s parent, International Distributions Services. The Department for Business, Energy and Industrial Strategy said in August, when Kwasi Kwarteng was secretary of state, that it was conducting a national security review amid signs that Vesa was preparing to build its stake in the UK’s main postal service past 25%, sparking speculation that a full takeover could follow.

Controversy surrounded any such bid because of Křetínský’s links with Russian business, including state-run energy giant Gazprom, at a time of sanctions against the country following its invasion of Ukraine. One Křetínský business, EP Infrastructure, owns almost half of Eustream, which is one of the biggest importers of Russian gas into Europe via a pipeline into Slovakia. Vesa is also owned by Patrik Tkáč, a Slovakian billionaire with a background in banking. It is also a shareholder in Holland’s Dutch PostNL.

Royal Mail remains at the centre of a bitter industrial dispute over pay and working practices as it seeks to focus on the delivery of parcels rather than letters. It said this month that the equivalent of up to 10,000 full-time jobs were at risk and that strike action was contributing to losses of £1 million per day.

The government notified Royal Mail today that no further action would be taken if Vesa took its stake above 25%. The announcement came alongside news that strikes planned by the Communications Workers’ Union for November, in the run up to the peak postal season at Christmas, were called off. That came ahead of talks between the two sides at the conciliation service Acas. Royal Mail said earlier this month that it wanted to discuss a voluntary redundancy scheme with the CWU to minimise compulsory job cuts.

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International Distributions Services posted the biggest single gain on the FTSE 250 today, up 14p or over 7% to 208p. The stock is down over 50% this year. The company previously reported an operating loss of £219 million for the first half of the year, with an expected full-year loss of £350 million.

Křetínský is also a major shareholder in West Ham and is the co-owner of Sparta Prague, the top-flight Czech team. He also has holdings in Sainsbury’s and Foot Locker as well as US retailer Macy’s and the French national newspaper Le Monde.  He is a lawyer by background and is the majority owner of central Europe’s largest energy company, EPH. He has been referred to in the press as “the Czech Sphinx” due to an enigmatic nature and a distaste for publicity.