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Czech Sphinx bids £3.5bn for Royal Mail takeover

GCA reacts to protect industry interests as RM board ‘minded’ to accept new offer

 

As an upgraded takeover bid is being mulled over by Royal Mail’s parent company, the GCA has called for its members’ interests to be seriously considered if the £3.5billion sale goes through.

International Distributions Services (IDS) had a fresh approach from EP Group on Wednesday 15 May, the business owned by Czech billionaire Daniel Křetínský whose initial £3.2bn offer was rejected a month ago, with a set of “undertakings” to protect key public interest on offer, leaving it “minded” to accept the deal.

Above: IDS chair Keith Williams (left) said the board is “minded” to accept the offer from Daniel Křetínský
Above: IDS chair Keith Williams (left) said the board is “minded” to accept the offer from Daniel Křetínský

With the news widely reported across the national media, the GCA’s ceo Amanda Fergusson’s statement has received significant coverage, amid concerns over RM’s recent efforts to water down its legally-binding universal service obligation to deliver letters across the UK six days a week for the same price.

She said: “The bid does nothing to change the concerns we’ve been expressing for some time. Our 500-plus members, largely small businesses, and the consumers they serve rely on a Royal Mail that’s national, reliable and affordable. That cannot be compromised.

“We will need to see these principles enshrined in any undertakings between the government, IDS and EP Group before any recommendation of this offer.

“It’s not just enough for EP Group to give contractual undertakings about first class, six days-a-week delivery – this must include an undertaking to deliver legal service standards in place at any time.”

Above: The offer includes undertakings to protect the 508-year-old institution
Above: The offer includes undertakings to protect the 508-year-old institution

The undertakings are reported to recognise the 508-year-old service’s status as a vital part of national infrastructure, continuing to deliver the key elements of the USO in the UK, keep the Royal Mail brand and HQ in the UK, and protect the interests of the workforce at both RM and sister European parcels business GLS.

IDS chair Keith Williams stated: “The board is minded to recommend this offer price, which it considers to be fair and reflects the value of GLS’ current growth plans and the progress being made on change at Royal Mail to adapt the business to a significant fall in the demand for letters and growth in parcels,”

But he added that it was “regrettable that, despite four years of asking, the government has not seen fit to engage in reform of the universal service and thus improve our financial position and ensure that Royal Mail could provide an economically sustainable service to the British public”.

Jonathan Reynolds, Labour’s shadow business secretary, called on Daniel Křetínský – known as the Czech Sphinx due to his inscrutable demeanour – to commit to safeguards to protect the business, publishing a letter to the billionaire on social media platform X in which he said: “Royal Mail is a beloved British institution whose symbol and mark is a huge source of pride not just to Royal Mail’s staff and customers but to wider British society. The future of Royal Mail as a British institution is imperative.”

Above: Labour’s shadow business secretary sent an open letter to the billionaire
Above: Labour’s shadow business secretary sent an open letter to the billionaire

He said Labour “would never accept” the company being operated overseas and added that it is imperative any purchase “comes with it cast-iron guarantees on the Royal Mail’s future, its core values and safeguarding this iconic British brand”, and added that “Labour is committed to the USO as Royal Mail’s central mission”.

Communication Workers Union (CWU) general secretary Dave Ward warned the “future of postal services in the UK is again under threat” with the bid to buy the owner of Royal Mail.

He said: “EP Group must immediately demonstrate an up-front and open commitment to working with the union to completely change the culture in workplaces across the UK, rule out any break-up of the company or raid of the pension surplus.

“The CWU are calling for a completely new ownership model – one based on innovation, growth and maintaining over 500 years of public service ethos.”

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