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At midday on Thursday a curious statement from Royal Mail crossed the regulatory newswires:
8 September 2022
Royal Mail plc (“Royal Mail”)
Communications Workers’ Union (CWU) media comment
We are aware that in recent media interviews, Dave Ward, the General Secretary of the CWU has indicated that we are in “secret talks” with a private equity investment group, he believes, regarding a takeover of Royal Mail. The Company wishes to make clear that this is not true. We are involved in no such talks.
What seems to have pushed Royal Mail into a formal denial was an early morning appearance by Ward on BBC Breakfast. For the full excruciating back-and-forth with interviewer Naga Munchetty, skip to 7.22am on BBC iPlayer.
We’ll begin the transcript just after Ward had talked about how strike negotiations were progressing, his Communication Workers Union having met with Royal Mail CEO Simon Thompson on Monday:
Ward: There’s an elephant in the room that Mr Thompson is not being honest about. And that is the fact that whilst we are in one room trying to resolve this dispute, the company we believe have been in another room talking to a private equity investment group about a takeover of the company. And to prove that that’s true, we’ve noticed now that the government have called the company in. So there’s an investigation going on under the National Security Act to do some sort of due diligence. So it’s very difficult to see how we can resolve the dispute. We’ve written to the Secretary of State to ask what the investigation is about, whether we can give evidence, whether the company is giving evidence and we’re concerned whether they’re being unduly influenced by the group that may well be looking to take over Royal Mail . . . .
Munchetty: OK, well —
Ward: … And I must add that if that if that happens, on top of all the things that are going on at the moment, that will see another iconic UK company under the control of a company based in Luxembourg. It’s just not on.
This time Munchetty successfully cuts in to say time is tight, and that she “can’t comment on that potential . . . umm . . . deal with an equity firm”. So can Ward return to the subject of pay and conditions?
No, he cannot. After a brief recap of talks with management, Ward loops back to his main theme:
Ward: Here’s the issue and I’m sorry to return to it but it’s absolutely an elephant in the room —
Munchetty: You have said this, I’m sorry, you have said this. You have said this. I haven’t got the time.
Ward: — Sorry?
Munchetty: Go on then. Make the point. If it’s a new point. Please.
Ward: The point is, we could be talking to people who are no longer in control of Royal Mail in a matter of weeks, so they’ve got to come clean about what’s going on.
Munchetty changes tack, asking whether there’s any point in the union having discussions with Royal Mail while there’s the spectre of “this potential new deal you think is happening”. Ward says no, but still won’t ignore that pesky elephant:
Ward: There’s an added issue that’s a massive obstacle. You can’t negotiate with people who are not telling the truth about their future plans for the company, and the government are involved now. The government are actually investigating this company under a national security act, because they believe Royal Mail is part of the key infrastructure of the UK. So it is a big issue, nothing’s resolved, but we are being as constructive as we can to settle this dispute and we will always do that not just in the interest of out members but in the interests of our customers and the company.
Ward is thanked for his time and the show moves onto a outside broadcast segment with Hannah, who was in Newcastle to interview a pub landlord about the energy crisis.
Royal Mail shares were briefly positive in opening trade but had turned lower by midmorning, a couple of hours before the formal denial arrived. Ward’s credibility with breaking billion pound M&A news remains under evaluation.
Further reading:
Royal Mail turnround still needs the workers’ stamp of approval – FT
Royal Mail is a royal mess – FT
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