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Chancellor Jeremy Hunt has piled pressure on ‘Czech Sphinx’ Daniel Kretinsky after his £3.6billion bid for Royal Mail sparked fears over the future of the 508-year-old postal operator.
Hunt said regulators should look ‘very carefully’ at five-year undertakings made by the billionaire, which include promises on jobs and the UK-wide six-day service.
And a promise not to split up Royal Mail’s parent company International Distribution Services (IDS), which also includes European parcels business GLS, only lasts for three years.
Hunt told LBC: ‘That is something for the regulators to look at very carefully. We will make sure whoever takes over the Royal Mail, if someone does indeed take it over, that those things that people depend on are safe.’ Pressed on Kretinsky’s guarantees, he said: ‘I can’t predict what’s going to happen in five years’ or ten years’ time, but three years is a very long time.
‘And I’m sure the Government will keep it under review. And it’s entirely possible, we will decide that we should extend it beyond that.’
Concerns: But Chancellor Jeremy Hunt (pictured) has indicated that he is not opposed to the Royal Mail deal in principal
The comments come a day after IDS accepted a bid from Kretinsky’s EP Group – which will see the Royal Mail fall into the hands of foreign owners.
‘I do think that for our economy to modernise we need to attract investment from all over the world,’ the Chancellor said.
But the deal will also face a national security probe and City analysts are sceptical that the pledges made by the bidder will be enough to convince ministers to give it the green light.
Yesterday, shares fell 1p, or 0.3 per cent, to 334p, well below EP’s offer price of 370p and a sign that the City does not yet see the takeover as a done deal.
Kretinsky is IDS’s biggest shareholder with a 28 per cent stake. But his bid faces opposition from other investors.
Columbia Threadneedle Investments, which holds a stake of about 5 per cent, believes the offer undervalues the group. Jeremy Smith, its co-head of UK equities, said: ‘We believe that the management has done a good job to turn the company around and additional equity value can be delivered.’
Results published last week show that Royal Mail is losing £1million a day though the company says that it is turning around its performance.
