Royal Mail has accepted a mammoth £3.6bn takeover bid by Czech billionaire Daniel Křetínský.
The board of parent company International Distribution Services (IDS) said on Wednesday morning it recommends the deal worth 360p per share, alongside a special dividend when the offer becomes unconditional, lifting it to 370p per share.
Including debt, the total deal values IDS at £5.28bn.
Scrutiny awaits
The offer comes with ‘safeguards’ on job losses, however the bid will be subjected to scrutiny by regulators over the coming months.
Business Secretary Kemi Badenoch, who has yet to meet Křetínský, does have the power to potentially block the deal.
However, the government chose not to intervene in 2022 when the Czech businessman raised his sate from 22% to 27.5%.
Commenting on the announcement, Křetínský, founder and chairman of EP, said: "IDS, and Royal Mail in particular, form part of the national infrastructure of the countries they operate in. More than that, Royal Mail is part of the fabric of UK society and has been for hundreds of years.
“The EP group has the utmost respect for Royal Mail's history and tradition, and I know that owning this business will come with enormous responsibility - not just to the employees but to the citizens who rely on its services every day.
“The scale of the commitments we are offering to the company and the UK Government reflect how seriously we take this responsibility, to the benefit of IDS' employees, union representatives and all other stakeholders.
“The EP group is a patient, supportive investor with a long-term view and decades of experience in owning critical national infrastructure. We are committed investors in the UK and first became a shareholder in IDS four years ago, as we saw the potential for the business to become one of the largest postal logistics groups in Europe. "
Keith Williams, Chair of IDS, added: "IDS has the potential to become a leading international logistics player. Both the IDS Board and EP are acutely aware of their responsibilities to IDS and particularly to the unique heritage of Royal Mail and its obligations as the designated Universal Service Provider of postal services in the UK.
“The IDS Board has negotiated a far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards. These cover the provision of the one-price-goes-anywhere Universal Service Obligation (including First Class letters still delivered six days a week), the financial stability and maintenance of the IDS Group including Royal Mail, the maintenance of employee benefits and pensions, and ensuring Royal Mail remains headquartered and tax resident in the UK.
“The IDS Board wishes to thank our employees across Royal Mail and GLS for the progress which is being made in both companies to transform and adapt to a rapidly changing market in both the UK and Europe.
“It is the IDS Board's belief that EP will continue to enhance IDS' investment in strategic areas such as network and out-of-home solutions.
“The IDS Board believes that the offer from EP is fair and reasonable given that there are uncertainties ahead and allows investors to realise value at a significant premium."