What do Royal Mail and Atos have in common?

For those following the Atos story as it continues to unfold, the news that Royal Mail’s parent company, International Distribution Services (IDS), has agreed to a £3.6bn takeover bid by Czech billionaire, Daniel Kretinsky, might have piqued interest.  

Kretinsky is, of course, also one of the suitors currently waiting to hear the Atos Group’s decision on its financing options.

The ‘stories’ have been playing out alongside each other. Kretinsky’s interest in taking over IDS, in which he already held a 27% stake via investment vehicle, VESA Equity Investment (the subsidiary 100% owned by EP Equity Investment (EPEI)), was first reported in mid-April. His first formal offer, via investment vehicle, EP Group, was made on 17th April but was rejected. This latest offer – now accepted by the Board – values IDS at £3.5bn.

Meanwhile, Kretinsky’s initial interest in Atos came in August 2023 when the Group announced it was in final negotiations with Kretinsky’s investment firm, EP Equity Investment (EPEI) (also via VESA), regarding the sale of one part of its business: Tech Foundations (see EPEI to acquire Atos Tech Foundations | TechMarketView). Those negotiations came to a head with no agreement on 28th February this year (see EPEI door closes for Atos | TechMarketView). However, on 7th May, it was confirmed that EPEI, alongside London-based asset manager, Attestor Limited, was one of the bidders that had submitted refinancing proposals to the Atos Group (see Atos refinancing proposals: high contrast, high stakes | TechMarketView). Atos is targeting this Friday (31st May) to reach agreement on a financial restructuring solution acceptable to its financial creditors.

EPEI’s interest is in listed European companies operating in a diverse range of sectors, including food and other consumer retail, logistics including postal services, and media sectors. It looks for companies with clear “value creation potential”. Most recently, it participated in the accelerated safeguard procedure and related debt restructuring of retail group, Groupe Casino Guichard Perrachon (completed March 2024). In submitting its Atos bid (see here), it highlighted that the Groupe Casino deal proved its position as a “reliable and trusted partner in complex restructuring scenarios”.

There is, though, no guarantee that either the Royal Mail or Atos takoevers will go ahead. For starters, there is big chance that Kretinsky’s takeover of IDS is blocked by the Government under the National Security & Investment Act, which considers the national security risks arising from the acquisition of control over certain types of entities and assets. The review of the takeover could be lengthy, particularly in light of the forthcoming General Election. Kretinsky has tried to allay fears by promising safeguards on things such as UK job losses and UK tax residency. However, although a previous increase in shareholding to above 25% was investigated and allowed to go ahead, a full takeover is likely to be a different story.

Meanwhile, rumours abound – as reported by Reuters earlier this month – that Atos bondholders fear EPEI breaking up the Atos Group and are set to reject the offer as a result. We only have a couple of days before we find out for sure.

Posted by: Georgina O’Toole at 09:44