Britain’s 500-year-old Royal Mail is being bought by a Czech billionaire
Is Selling Royal Mail to a Czech Tycoon Wise?
Czech billionaire Daniel Křetínský has agreed to acquire Britain's Royal Mail for £3.57 billion, marking the first time the historic postal service will be foreign-owned. International Distribution Services accepted the offer amid financial struggles, with Royal Mail reporting a loss of £348 million last year. The deal includes commitments to maintain service standards, employee benefits, and Royal Mail's UK base, addressing concerns about the future of this vital national infrastructure.
What commitments has EP Group made to address concerns regarding the future operations of Royal Mail?
EP Group, owned by Czech billionaire Daniel Křetínský, has made several commitments to address concerns regarding the future operations of Royal Mail2. These commitments include:
- Upholding Royal Mail's "universal service obligation," which requires it to deliver letters six days a week everywhere in the United Kingdom for the same flat fee.
- Maintaining employee benefits and pensions.
- Keeping Royal Mail's headquarters and tax base in the UK.
These commitments aim to ensure the stability and continuity of Royal Mail's operations, as well as addressing concerns about the potential impact on workers and the general public.
What are the financial terms of the takeover bid accepted by International Distribution Services for Royal Mail?
The financial terms of the takeover bid for Royal Mail by Czech billionaire Daniel Křetínský's EP Group, as accepted by International Distribution Services (IDS), involve a purchase price of £3.70 per share, totaling approximately £3.57 billion ($4.6 billion). This valuation includes the assumption of debt, bringing the overall value of the deal to £5.28 billion once debt is factored in. Additionally, the offer includes a final dividend of 2p per share and a special dividend of 8p per share6. This comprehensive financial package was deemed fair and reasonable by the IDS board, considering the uncertain future and the opportunity it presents for investors to realize value at a significant premium1.