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The saga around Royal Mail continues, with confirmation that parent group International Distributions Services has rejected a potential takeover bid from a group connected to its biggest shareholder and to Czech billionaire Daniel Křetínský.
IDS said it received a “preliminary and conditional non-binding proposal” of 320p per share from EP Corporate Group.
Affiliate company Vesa Equity Investment is the biggest shareholder in IDS with a 27.5% stake.
In a statement the IDS board said it had carefully considered the possible offer, along with its advisers, and concluded it “significantly undervalues IDS and its future prospects”.
The proposal was rejected on 11 April.
“The board believes the timing of the proposal is opportunistic. It does not reflect the growth potential and prospects of the company under a new management team, a significant modernisation programme underway at Royal Mail, and the ongoing review by Ofcom in relation to the Future of the Universal Service Obligation,” IDS stated.
Reacting to the news, the Communication Workers Union (CWU) said it “cannot be right” to hand over the ownership of one of the UK’s most prestigious institutions to a foreign equity investor.
But the union also criticised the current model and direction of the company.
“The truth is Royal Mail needs a new ownership and governance model that builds a postal service for the workers and customers and not one built solely focused on shareholder payouts and driving down the service and the terms and conditions of the workers,” stated general secretary Dave Ward and Martin Walsh, deputy general secretary (postal).
“The CWU will be campaigning publicly and politically to deliver this change of direction.”
One long-suffering direct mail specialist reacted to the latest turn of events and said: “The status quo has to be challenged as it can’t go on for Royal Mail or Royal Mail users as it is. Let somebody else have a go.”
Back in 2002 then-Secretary of State Kwasi Kwarteng said it would be a “trigger event” under the National Security & Investment Act if Vesa increased its already substantial stake in Royal Mail to more than 25%.
However, in the end no further action was taken.
Shares in IDS rose on the news, from 216.56p yesterday, to 285.20p earlier today (52-week high: 291.20p, low: 191.20p).
The current market cap of IDS is £2.56bn.
Takeover rules mean EP Group has until 5pm on 15 May to come back with a firm offer, or not.
Earlier this month Royal Mail went public with its wish list for reform of the Universal Service Obligation, and also announced that Emma Gilthorpe will join as its new CEO on 1 May.
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