Postal workers have told the ‘Czech sphinx’ billionaire bidding to take over Royal Mail for £3.6billion that his firm’s commitments are ‘not enough’.
Businessman Daniel Kretinsky, 48, has previously been accused of undervaluing the postal company with his £3.57 billion offer to take over the firm.
Known as the ‘Czech Sphinx’ for his inscrutable nature, his purchase of IDS — which may yet be subject to government scrutiny — could take the UK’s 500-year-old postal service into fully foreign ownership for the first time.
He already owns more than a quarter of IDS, which controls Royal Mail, Parcelforce and international mailing service GLS.
Officials from the Communication Workers Union (CWU) met representatives of the EP Group, describing it as ‘useful and constructive’.
They added that further meetings would take place including the direct involvement of Mr Kretinsky himself.
CWU general secretary Dave Ward said: ‘We made it very clear that the current commitments from EP Group are neither strong enough or long enough.
Czech billionaire Daniel Kretinsky (pictured) who has offered £3.6billion to take over the postal firm
Officials from the Communication Workers Union (CWU) met representatives of the EP Group, describing it as ‘useful and constructive’. Pictured: CWU general secretary Dave Ward
It comes after The Times reported concerns among investors, that ‘operational benefits’ of an agreement between Royal Mail and the Communication Workers Union. Pictured: File photo
‘Daniel Kretinsky has openly stated he wants to own Royal Mail for the rest of his life – we need commitments for the workforce that match that level of ambition.
‘The CWU put forward our wide-ranging concerns and also our view that we need to see a completely new ownership/business model for Royal Mail and one that gives all employees a real stake in the future of the business. Both parties have agreed to explore this further.
‘Royal Mail have led a prolonged and deliberate attack on its own workforce which continues to this day in many workplaces.
‘Representatives of EP Group understood the reality that unless the workforce are on board, the company will never succeed.’
Mr Ward said the union was increasing its plans to engage with the Government and Labour on the takeover bid, believing it needed to be ‘heavily scrutinised and debated’.
He added: ‘We do not support a foreign equity company taking over Royal Mail. At the same time, we have absolutely no confidence in the current board of the company.
‘Royal Mail should be renationalised but the political climate makes that very difficult at the moment. Our job now is to make sure our members voice is heard at every opportunity as this takeover bid unfolds.’
It comes after The Times reported concerns among investors, that ‘operational benefits’ of an agreement between Royal Mail and the Communication Workers Union — including a workforce pension scheme surplus and property estate — have not been properly valued.
There are also doubts that a Labour government, which could potentially be elected in July, would approve the deal and the offer is too low for some shareholders. Pictured: File photo
According to The Times, shares in the Royal Mail hit a two-year high after the board recommended the takeover by Mr Kretinsky. Pictured: File photo
The IDS’ board rejected EP Group’s initial 320p-a-share offer last month and has since been engaging with investors.
According to The Times, shares in the Royal Mail hit a two-year high after the board recommended the takeover by Mr Kretinsky.
But the stock actually remains short of the 370-p-a-share value of the offer.
There are also doubts that a Labour government, which could potentially be elected in July, would approve the deal and the offer is too low for some shareholders.
The EP Group’s offer has acquiesced to a demand from IDS bosses to keep the Royal Mail name and brand, and for the postal service to retain its UK headquarters and tax residency, in order to keep it tied to Britain.
The deal looks set to include Royal Mail’s proposal to deliver second class post every other weekday, which it applied to Ofcom for earlier this month, pending consultation.
Shareholders will vote on the deal at IDS’s next annual general meeting in September – at a perilous time for Britain’s universal postal service. The deal values the group at £5.2bn.
Gerald Khoo at investment bank Liberum Capital told The Times he believes the deal would not receive government approval under the National Security and Investment Act. He warned investors that shares could fall to as low as 200p.
Keith Williams, chairman of the company, said: ‘IDS has the potential to become a leading international logistics player.
The deal looks set to include Royal Mail’s proposal to deliver second class post every other weekday, which it applied to Ofcom for earlier this month, pending consultation. Pictured: File photo
‘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.’
However, these commitments are only guaranteed for the first five years of Mr Kretinsky’s ownership of IDS – alongside a pledge not to strip its assets, and a promise to keep using the Royal Mail name and to use the Royal Cipher.
There is no guarantee that these promises, along with pledges to recognise unions and continue delivering first-class post six days a week, will remain in place after five years have elapsed.
Mr Kretinsky said he had the ‘utmost respect for Royal Mail’s history and tradition’. The deal is not believed to come with any requirements of redundancies beyond those factored into the Royal Mail’s existing cost-cutting plans.