Royal Mail takeover delayed by political crisis in Romania

The £3.6 billion takeover of the owner of Royal Mail by a Czech tycoon has been delayed by the political crisis in Romania.

International Distribution Services, Royal Mail’s London-listed parent company, recommended a 370p-a-share takeover by EP Group, a conglomerate controlled by Daniel Kretinsky, to its shareholders last May.

The deal was expected to be clinched by the end of this month after Kretinsky, 49, agreed key undertakings with the British government to safeguard Royal Mail in the UK in December and it subsequently received regulatory clearance in the European Union and the United States.

However, approval in Romania — the only outstanding regulatory condition — is yet to be secured. Part of Kretinsky’s business operates there.

International Distribution Services also owns GLS, a parcel business that operates across Europe and North America.

In an update on the takeover timetable on Wednesday, EP Group said it was not aware of any “substantive issues” raised by the Romanian authorities “relating to the satisfaction of the Romanian foreign direct investment condition”. However, it said it now expected the takeover to be declared unconditional in the second quarter of this year, rather than by the end of the first.

The presidential election in Romania was cancelled in November and has been rescheduled for May after police alleged Russian interference in the viral TikTok campaign of Calin Georgescu, the frontrunner. He risks being banned from elections after prosecutors recently alleged that he received illicit funding from a mercenary group.

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Once the deal receives clearance in Romania, the takeover offer period will formally open when enough shareholders are expected to tender in favour.

The undertakings agreed with the government in December span commitments to Royal Mail’s brand and cypher, the universal service obligation, pension surplus and its financial strength. The deal has also been authorised under a separate National Security and Investment Act review.

Kretinsky, nicknamed the Czech Sphinx for his inscrutable style, has invested fortunes raised from energy assets into food, media, logistics and sports stakes, including J Sainsbury and West Ham United football club.