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- Shareholders sent offer document on June 26 but the document was 140 pages
Another storm of protest is rising over the controversial takeover of Royal Mail by the Czech billionaire Daniel Kretinsky.
The delivery firm’s owner International Distribution Services (IDS) has been slammed for ‘deliberately’ making it hard for hundreds of thousands of private shareholders to have their say on the £3.6billion deal.
Shareholders were sent an offer document on June 26 but the document was 140 pages long and it was unclear how to vote for or against the deal. The information was branded ‘unhelpful’ by shareholder rights groups.
Brewing: Another storm of protest is rising over the controversial takeover of Royal Mail by a Czech billionaire
A spokesman for the UK Shareholders Organisation said: ‘As an organisation, we find that the information made available by IDS is unhelpful to the point that one wonders if it is a deliberate ploy by IDS and Royal Mail.’
ShareSoc, which also represents private shareholders, added that it is ‘concerned that individual investors may have had difficulty in knowing how to accept or oppose the offer’.
It highlighted the ‘lack of plain language’ in the 140-page offer document, saying it is too ‘complex and legalistic’.
A ShareSoc spokesman said: ‘We have been contacted about this by individual investors and stand ready to assist our members, where we can.’
An IDS spokesman said: ‘The takeover of IDS, as a UK listed company, is subject to the strict requirements of the Takeover Code. The offer document has been prepared in line with the format prescribed by the [code].
‘We don’t understand why the UK Shareholder’s Association and ShareSoc are querying the materials but are contacting them to understand any specific concerns.
Takeover: Daniel Kretinsky is on a mission to complete a takeover of Royal Mail owner IDS
‘We appreciate that the formal offer document sent out to shareholders is long, complex and technical and understand that some shareholders may find the information difficult to digest.’
These concerns have been heightened by the view that Kretinsky, 49, who is nicknamed the Czech Sphinx for his inscrutability, could be gaining control of Royal Mail on the cheap.
This follows last week’s announcement from regulator Ofcom that it may relax the Universal Service Obligation (USO) on making changes to the delivery of second-class letters, which would only be delivered every other working day and not on Saturdays.
The USO requires Royal Mail to deliver letters six days a week to 32million homes for the fixed price of a stamp.
These proposals would save about £300million, suggesting that IDS is worth much more than the 370p-a-share being offered by Kretinsky since he would be the beneficiary of the concession.
Also, Kretinsky is refusing to rule out further price rises for stamps. First-class stamps are already going up from £1.35 to £1.65 next month.
Under Ofcom’s proposals, first-class post and parcels would still be delivered six days a week, but there is no cap on how much Royal Mail could charge for postage. Kretinsky has made a commitment to uphold the USO – but only for five years.
The IDS board has backed Kretinsky’s bid, sending shockwaves through the City and Westminster. But investors holding at least 75 per cent of IDS shares must give the takeover the green light.
Most IDS shares are owned by large institutional investors and Kretinsky is the biggest shareholder with a 27.5 per cent stake.
But many people, including current and former posties, also bought – or were given – shares when the Coalition government privatised the service in 2013.
During the share sale, it was not anticipated that the postal service – established in 1516 – would be allowed to fall into foreign ownership. Royal Mail staff still own 5.5 per cent of the shares.
Some 700,000 people backed the privatisation.
The UK Shareholders’ Association said the information provided to shareholders is not easily accessible, transparent or understandable.
The spokesman said: ‘If IDS want well-informed and well-engaged shareholders, they must make the information more digestible. If they don’t, then their chosen approach is spot on.
‘If this offer is being conducted according to the rules then we’d better change the rules.’
The deal was called in for investigation by the Government last month over national security concerns. No date has been given for the outcome of this investigation.
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