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The owner of the Royal Mail said it would be prepared to recommend a £5bn takeover bid from Czech billionaire Daniel Křetínský, as long as several conditions safeguarding the group’s future are met.
International Distribution Services, the owner of Royal Mail, said on Wednesday that Křetínský’s EP Group had raised its bid to 370 pence a share from 320p, which IDS rejected last month.
Including debt, the improved bid values London-listed IDS at £5bn, up from £4.5bn in the first bid. As well as the former UK postal monopoly, IDS owns the fast-growing Netherlands-based parcels business GLS.
“The Board is minded to recommend this offer price, which it considers to be fair,” said Keith Williams, the chair of IDS, adding that EP Group had agreed to several undertakings that “recognise Royal Mail’s status as a key part of national infrastructure”.
The undertakings include continuing six-day-a-week delivery of first class letters, keeping the group’s headquarters in the UK and preserving the investment grade credit rating of IDS.
IDS said that its “board will continue to engage with EP Group to seek to reach agreement on the exact scope and duration of such undertakings”.
Since Křetínský’s first proposal was rejected last month, the two sides have been in talks over an improved bid.
Křetínský, a lawyer-turned-energy tycoon, is the largest shareholder in IDS, with a 27.5 per cent stake. His other UK investments include a stake in supermarket chain J Sainsbury and London football club West Ham United.
EP Group now has until May 29 to make a firm offer for IDS under UK rules governing takeover bids for public companies.
