- Daniel Kretinsky was previously accused of undervaluing the postal service
Postal workers have told the ‘Czech sphinx’ billionaire who wants to take over Royal Mail for £3.6 billion that his company’s commitments are ‘not enough’.
Businessman Daniel Kretinsky, 48, was previously accused of undervaluing the postal service with his £3.57 billion bid to take over the company.
Known as the ‘Czech Sphinx’ because of its inscrutable nature, his purchase of IDS – which may still be subject to government oversight – could put Britain’s 500-year-old postal service into completely foreign hands for the first time.
He already owns more than a quarter of IDS, which controls Royal Mail, Parcelforce and the international postal service GLS.
Officials from the Communication Workers Union (CWU) met with representatives of the EP Group and called the meeting ‘useful and constructive’.
They added that further meetings would take place, including the direct involvement of Mr Kretinsky himself.
CWU Secretary General Dave Ward said: ‘We have made it very clear that the EP Group’s current commitments are not strong enough or long enough.
Click here to change the format of this module
“Daniel Kretinsky has openly stated that he wants to own Royal Mail for the rest of his life – we need workforce commitments to match that level of ambition.
‘The CWU raised our broad concerns and also our view that we need a completely new ownership/business model for Royal Mail, one that gives all employees a real stake in the future of the company. Both parties have agreed to investigate this further.
‘Royal Mail has led a sustained and deliberate attack on its own staff that continues in many workplaces to this day.
“EP Group representatives understood the reality that the company will never succeed if its workforce does not cooperate.”
Mr Ward said the union was expanding its plans to engage with the government and Labor over the takeover bid as he believed it “needed to be heavily scrutinized and discussed”.
He added: ‘We do not support a foreign share company taking over Royal Mail. At the same time, we have absolutely no confidence in the current management of the company.
‘Royal Mail should be re-nationalised, but the political climate makes that very difficult at the moment. Our job now is to ensure that our members’ voices are heard at every opportunity as this takeover bid unfolds.”
It comes after The Times reported concerns among investors that the “operational benefits” of a deal between Royal Mail and the Communication Workers Union – including surplus staff pension schemes and real estate – have not been properly valued.
Click here to change the format of this module
The IDS board rejected EP Group’s initial offer of 320p per share last month and has since entered into discussions with investors.
According to The Times, Royal Mail shares hit a two-year high after the board recommended Kretinsky’s takeover.
But the stock actually remains below the offering’s share value of 370 per year.
There are also doubts whether a Labor government, which could be elected in July, would approve the deal and the offer is too low for some shareholders.
The EP Group’s offer has agreed to a demand from IDS bosses to retain the Royal Mail name and brand, and for the postal service to retain its UK headquarters and tax residence, in order to remain connected to Britain.
It appears the deal will include Royal Mail’s proposal to deliver second-class mail every other weekday, for which it applied to Ofcom earlier this month, pending consultation.
Shareholders will vote on the deal at IDS’s next annual general meeting in September – at a perilous time for the UK’s universal postal service. The deal values the group at £5.2 billion.
Gerald Khoo of investment bank Liberum Capital told The Times he believes the deal would not receive government approval under the National Security and Investment Act. He warned investors that shares could fall as low as 200 cents.
Keith Williams, chairman of the company, said: ‘IDS has the potential to become a leading international logistics player.
‘Both the IDS Board and the EP are acutely aware of their responsibilities to IDS and in particular to Royal Mail’s unique heritage and its obligations as a designated universal provider of postal services in the United Kingdom.
“The IDS Board has negotiated a far-reaching package of legally binding commitments and commitments that provide important safeguards for our customers, employees and wider stakeholders.
‘These relate to the provision of the Universal Service Obligation (one-price-goes-anywhere) (including First Class letters which continue to be delivered six days a week), the financial stability and maintenance of the IDS Group, including Royal Mail, maintaining employee benefits and pensions , and ensuring that Royal Mail remains headquartered and tax resident in the UK.”
However, these commitments are only guaranteed for the first five years of Mr Kretinsky’s ownership of IDS – alongside a pledge not to strip assets, and a pledge to continue using the Royal Mail name and the Royal Cipher.
There is no guarantee that these promises, along with promises to recognize unions and continue delivering first-class mail six days a week, will remain in place after five years.
Mr Kretinsky said he had ‘the utmost respect for the history and tradition of Royal Mail’. It is believed the deal will not involve redundancies beyond those set out in Royal Mail’s existing cost savings plans.