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Daniel Kretinsky, the Czech Sphinx who wants to take over Royal Mail, learned his trade in the turmoil that followed the lifting of the Iron Curtain.
The Velvet Revolution of 1989 happened in his formative years as a teenager. As a young man, he watched and learned as a new breed of capitalist in Eastern Europe seized their chance to make vast fortunes buying up formerly state-owned assets.
He went on to build a multi-billion pound fortune by acquiring dirty energy assets from companies trying to go green, an activity that earned him a less flattering sobriquet as a ‘fossil hyena’.
Any highly successful scavenger is, by definition, an opportunist who sees potential profits others overlook. So what might Kretinsky see in Royal Mail?
First, there is value to be unlocked if the Government finally gives a green light to reform the Universal Service Obligation that requires Royal Mail to deliver to all UK addresses six days a week.
Uncertain future: The Government could block the deal on national security grounds
The leadership team of chief executive Martin Seidenberg and chairman Keith Williams has, conveniently, done the groundwork on this.
Savings of up to £300m would go to Kretinsky if his bid succeeds.
Kretinsky might sell off GLS, the profitable Netherlands-based parcels business, which would be worth more freed from the Royal Mail millstone. His camp has intimated this is not on the cards, but given he claimed a year ago he had no intention of bidding for Royal Mail, perhaps this should not be given unstinting credence.
As an astute real estate investor with a North London mansion and a Parisian townhouse, he will also be alive to Royal Mail’s £1.4billion of property assets.
These include the Mount Pleasant site in the heart of the capital, which is still used for sorting letters but could be redeveloped as luxury flats.
It’s easy to see what might be in it for Kretinsky, but less so for the rest of us.
The Government could block the deal on national security grounds, but indications from business secretary Kemi Badenoch are that she will simply seek guarantees from Kretinsky over key services.
Such pledges, have, in several episodes in the past, not been worth the paper they were written on.
Labour, whose former business secretary turned banker Chuka Umunna is advising Kretinsky, has also written to the tycoon asking for pledges.
All of which sounds mealy-mouthed in the face of the Sphinx’s steam-roller. If a business can genuinely be better run under new ownership, then a takeover can be good news for stakeholders in the long term.
This is not the case at Royal Mail, where new-ish chief executive Martin Seidenberg had a convincing plan for the company. Kretinsky appears simply to be snatching the fruits of that for himself.
It’s a shame the Royal Mail board rolled over and recommended the bid. Past experience tells us that when chairmen and CEOs choose to kick back against a bidder, they can win. Even if a defence fails, putting up a good fight can make a difference.
The watershed case was in 2010 at chocolate maker Cadbury, where chairman Sir Roger Carr eventually had to succumb to a Kraft takeover.
But it was a gallant defeat – and the gusto with which Carr went into battle, along with broken promises from Kraft – led to a revamp of the rules on takeovers to guard against unscrupulous raiders.
Fourteen years on, it seems the lessons from the notorious Cadbury bid need to be learned all over again.
