The £60bn foreign takeover frenzy: Royal Mail just the latest UK firm to be targeted

Royal Mail is just the latest British company to be targeted by foreign buyers this year with the value of bids from overseas topping £60billion.

In one of the most dramatic days in the 508-year history of the postal service, parent company International Distribution Services (IDS) backed a takeover offer from Czech billionaire Daniel Kretinsky of 370p per share, or £3.5billion.

The offer marked an increase of almost 16 per cent on the previous rejected bid of 320p put forward by the tycoon’s EP Group.

And it takes the total value of bids on London-listed firms from overseas to more than £60billion this year, according to City broker Peel Hunt.

Kretinsky – known as the ‘Czech Sphinx’ – already owns 27.5 per cent of IDS and co-owns West Ham United FC and holds a stake in Sainsbury’s.

IDS chairman Keith Williams said it was a ‘fair’ price and reflected ‘current growth plans and the progress being made’.

A deal with Kretinsky would see loss-making Royal Mail taken into foreign ownership for the first time since it was established by Henry VIII in 1516.

However, while IDS shares soared 16 per cent, or 43.4p, to 314.8p, the price is still well below the 370p offer price, suggesting investors believe the deal may not go through.

The swoop follows a string of takeovers in 2024 with packaging group DS Smith, telecoms testing company Spirent Communications and haulage firm Wincanton among those falling to overseas bidders.

Last month cyber-security group Darktrace backed a £4.2billion takeover by US private equity firm Thoma Bravo.

But some companies, although targeted by foreigners, have been putting up a fight.

Anglo American has rebuffed two offers from Australian miner BHP, while Currys and Direct Line have defended themselves from bids.

In a further act of defiance, FTSE 250 Wood Group was the latest to snub a takeover push from Dubai rival Sidara.

The industrial engineering group yesterday turned down a £1.5billion offer, worth 212p per share, just a week after rejecting Sidara’s first £1.2billion offer.

But the assault on UK plc has fuelled concerns that British companies are undervalued and face a ‘feeding frenzy’ of merger and acquisition activity.

A further concern is the lack of companies joining the stock market through initial public offerings (IPOs).

One analyst even warned that the London stock market was facing a ‘death by a thousand cuts’ as listed firms bow to foreign takeovers. 

But City analysts have suggested that IDS, which also owns Netherlands-based parcels business GLS, which is profitable, has managed to secure a decent sweetened deal considering its complex past.

Danni Hewson, analyst at AJ Bell, said: ‘Once you factor in all the baggage that comes with IDS, that feels like a fair price and it is hard to see anyone else rushing to trump that offer.’

But she added: ‘The fact the shares are trading nowhere near the 370p offer price implies the market has little faith it will get over the line.’

Royal Mail has been on a mission to reform the Universal Service Obligation, which means it must deliver letters nationwide for the same price every day except Sunday.

Williams blasted ministers for failing to allow reform of the Royal Mail to take place, leaving it vulnerable to a takeover.

‘It is regrettable that despite four years of asking, the Government has not seen fit to engage in reform of the Universal Service and thus improve our financial position and ensure that Royal Mail could provide an economically sustainable service to the British public,’ he said.