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The Czech billionaire Daniel Křetínský’s takeover bid for Royal Mail has been called in by the UK government for closer scrutiny of any national security risks including potential links to Russia, the Guardian understands.
Royal Mail’s owner, International Distribution Services (IDS), agreed to a £3.57bn takeover by its largest shareholder, Křetínský’s EP Group, in May.
The bid will be scrutinised by the Cabinet Office, with help from the Department for Business and Trade, as to whether it could negatively affect a key part of the UK’s economic infrastructure, and the government could decide to block it.
Even if the takeover goes ahead, there will be a lengthy delay as the bid is suspended until the government announces the outcome of its review, expected within two months.
Under the deal, Křetínský, who made his fortune in energy and owns a minority stake in one of the main gas pipelines from Russia into Europe, would pay 360p a share for the 73% of the struggling postal service he does not already own.
The new Labour government decided to examine the sale of the formerly state-owned service to a foreign buyer under the National Security and Investment Act, a move first reported by the BBC. Any links to Russia will be carefully examined.
Křetínský’s companies own a minority stake in EUStream, a Slovakian pipeline that carries gas from Russia to western Europe and Ukraine. It is a transmission business and his companies do not buy Russian gas or have business dealings with Russia, according to people close to the process.
The previous government stepped in with a similar review when Křetínský increased his stake in Royal Mail’s parent company from 25% to 27.5% in August 2022, and cleared the increase in October that year.
Jonathan Reynolds, the business secretary, said last week before a meeting with Křetínský that it was “reasonable” to expect the government to call in the bid for review. . He added that he would look at how the government could receive binding assurances from the businessman, who also owns stakes in West Ham United Football Club and Sainsbury’s. One of the Czech Republic’s wealthiest citizens, he has been nicknamed the “Czech Sphinx” because of his reluctance to speak in public and an enigmatic approach to business.
The previous Conservative government had said the UK would look at the national security implications of the billionaire’s bid, but the then-chancellor, Jeremy Hunt, indicated ministers were not opposed to the takeover in principle.
In May, IDS bosses held a meeting with the then business secretary, Kemi Badenoch, to discuss the bid and reforms to the universal service obligation (USO), which guarantees delivery to every home in the UK six days a week.
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EP has committed to a number of undertakings and contractual commitments as part of its offer, including maintaining the delivery of first-class post six days a week, and keeping the business’s headquarters in the UK for five years. Křetínský also supports a Royal Mail plan to cut deliveries of second-class post to every other weekday.
The union representing postal workers has called for staff to be handed a serious stake in Royal Mail, after Křetínský floated the possibility of implementing an “incentive scheme” if he was successful.
Amanda Fergusson, the chief executive of the UK Greeting Card Association, said: “Whoever owns Royal Mail, we’re all looking for lock-tight, long-term undertakings on affordability and reliability. Above all communities need a postal service that performs, serving the needs of small businesses and consumers.”
The Cabinet Office, EP Group and IDS all declined to comment.
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