Daniel Kretinsky’s EP Group said it would consider ‘all options’ after its all-cash proposal was rebuffed by International Distribution Services.
Royal Mail owner International Distribution Services has seen shares soar higher after it was revealed the group rejected a takeover approach from shareholder and Czech billionaire Daniel Kretinsky.
Mr Kretinsky’s EP Group said it put forward an all-cash proposal on April 9 to buy the shares in International Distributions Services (IDS) that it does not already own.
The sprawling EP Group conglomerate – which has interests spanning energy, logistics and food retail – has already built up a stake of around 27.5% in the Royal Mail owner through Mr Kretinsky’s Vesa Equity Investment vehicle, making it the biggest investor in IDS.
It said while the takeover proposal was rejected by the IDS board, it would continue to “engage constructively with the board as EP Group considers all its options”.
Shares in IDS jumped 15% in Wednesday afternoon trading after news of the approach was confirmed following reports of bid interest.
EP Group said it recognises the “challenging situation” faced by Royal Mail, but would be prepared to support “this iconic business as it transforms and rebuilds into a modern postal operator”.
It said: “Weak financial performance, poor service delivery and a slow transformation, in the face of a market going through structural change, have put the business under unsustainable pressure.
“With the increasing competition from multinational companies in the UK postal market, private investment in Royal Mail becomes crucial.”
It added that Royal Mail is an “important national asset that would benefit from being able to take a longer-term view”.
The group said: “As a committed long-term investor in the UK, EP Group recognises the importance of the Royal Mail business to its various stakeholders, including employees, trade unions, customers and government, as the UK’s sole designated universal service provider.
“EP Group has submitted its non-binding indicative proposal to IDS with the interests of these important stakeholders in mind.”
EP Group has until May 15 to make a bid or walk away under UK takeover rules.
Mr Kretinsky, who is said to be known as the “Czech Sphinx”, already has a raft of investments, including stakes in London football club West Ham United, supermarket giant Sainsbury’s and French newspaper Le Monde.
