Royal Mail’s owner said it had accepted a cash offer from the Czech billionaire Daniel Křetínský for the struggling postal service.

The West Ham director made a formal submission of £3.57bn to International Distribution Services (IDS), which implies an enterprise value of around £5.3bn.

This is an improvement on an earlier £3.1bn offer that IDS said significantly undervalued Royal Mail.

If the deal is approved it means Křetínský’s EP Group would pay 370p per share to IDS shareholders.

Křetínský said: “The EP group has the utmost respect for Royal Mail’s history and tradition, and I know that owning this business will come with enormous responsibility – not just to the employees but to the citizens who rely on its services every day. The scale of the commitments we are offering to the company and the UK government reflect how seriously we take this responsibility, to the benefit of IDS’ employees, union representatives and all other stakeholders.”

Keith Williams, IDS chair, said the board had negotiated a far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards: “These cover the provision of the one-price-goes-anywhere universal service obligation – including first class letters still delivered six days a week – the financial stability and maintenance of the IDS Group including Royal Mail, the maintenance of employee benefits and pensions, and ensuring Royal Mail remains headquartered and tax resident in the UK.”

He added: “The IDS Board believes that the offer from EP is fair and reasonable given that there are uncertainties ahead and allows investors to realise value at a significant premium.”