Postal services ‘under threat’ as Royal Mail owner welcomes £3.5bn takeover bid

ROYAL MAIL’s future is “again under threat,” the CWU warned today after the owner of the privatised service welcomed an improved £3.5 billion takeover offer from Czech billionaire Daniel Kretinsky.

Parent company International Distribution Services (IDS) said that Mr Kretinsky’s EP Group had agreed to offer a set of “contractual undertakings,” including commitments to maintain six-day-a-week first-class letter deliveries under the universal service obligation, though leaving daily second-class deliveries at risk.

It would also protect workers’ rights and retain the Royal Mail brand, as well as its British headquarters and tax residence, under the proposed 370p-a-share buyout.

IDS had rejected a 320p-a-share bid by EP Group, which already owns a 27.5 per cent stake in the firm, made on April 9.

The offer came days after it emerged that IDS had asked industry regulator Ofcom to let it reduce deliveries of second-class letters to just two or three days a week, allowing it to axe nearly 1,000 jobs and reduce spending by £300 million a year.

Communication Workers Union (CWU) general secretary Dave Ward warned today that the “future of postal services in the UK is again under threat” after IDS chairman Keith Williams described the latest offer as “fair” and reflective of the value of both Royal Mail and its Dutch subsidiary GLS.

“EP Group must immediately demonstrate an upfront and open commitment to working with the union to completely change the culture in workplaces across the UK, rule out any break-up of the company or raid of the pension surplus,” Mr Ward said.

“It cannot be right that a key part of national infrastructure is allowed to be owned by individuals or companies who have no vision for the future and no clear plan to put the workforce at the heart of turning Royal Mail around.

“The CWU are calling for a completely new ownership model, one based on innovation, growth and maintaining over 500 years of public service ethos.”

Labour said that shadow business secretary Jonathan Reynolds had written to Mr Kretinsky calling for safeguards to be put in place to protect Royal Mail and ensure that it was not operated from overseas.

“Royal Mail is as British as it gets and Labour will take the necessary steps to safeguard its undeniable identity and place in public life,” Mr Reynolds wrote.

Chancellor Jeremy Hunt has hinted that there are “lessons” to be learnt from the ownership of troubled Thames Water.

A Department for Business and Trade spokesperson said: “We recognise the importance of the Royal Mail to the British public, and we are monitoring these developments very closely.

“Our priority is to ensure that Royal Mail customers get the service they deserve, including six days-a-week deliveries and a guaranteed standardised price for post throughout the UK, as enshrined by the universal service obligations, regardless of the owner.”