Royal Mail announces it has been bought for £3.57 billion by Czech billionaire Daniel Kretinsky's EP Group

The board of Royal Mail owner International Distribution Services said it has agreed to a £3.57 billion takeover offer from Czech billionaire Daniel Kretinsky's EP Group.

Businessman Mr Kretinsky already owned more than a quarter of IDS, which controls Royal Mail, Parcelforce and international mailing service GLS.

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. 

The EP Group's offer - at 370p a share - 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.

However, the deal also appears to include Royal Mail's previous ask of delivering second class post every other weekday.

Shareholders will vote on the deal at IDS's next annual general meeting in September. 

Keith Williams, chairman of the company, said: '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.'

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.

'IDS, and Royal Mail in particular, form part of the national infrastructure of the countries they operate in,' Mr Kretinsky said.

'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.'

However, he also warned of the need for 'modernisation' to keep up with the 'competition'. 

Royal Mail already has plans to cut second-class post deliveries and 1,000 jobs as it struggles to make ends meet while batting off competition from other couriers and postal firms like DPD, Yodel, Evri and Whistl.

While IDS is minded to agree the takeover, it is not a done deal. Business Secretary Kemi Badenoch has the power under the National Security and Investment Act to call in the deal - and potentially block it.

Mr Kretinsky's previous purchase of a slice of IDS came in for similar scrutiny.

Vesa Equity Investment, part of the businessman's EP Group, bought a five percent share in IDS in 2020, and then ate up more of the company over the next two years until a bd to increase its share beyond a quarter was called in by the government.

Then-business secretary Kwasi Kwarteng ultimately opted not to take any action and allowed Kretinsky's firm to increase its share to 27.5 per cent.

Shadow business secretary Jonathan Reynolds wrote to Mr Kretinsky earlier this month urging him to ensure Royal Mail remained a 'beloved British institution' in the event the buyout went ahead.

The Communication Workers Union (CWU), which represents postal workers, is not confident the deal will be good news for Royal Mail.

General secretary Dave Ward said: 'We do welcome some of the commitments that have been made but the reality is postal workers across the UK have lost all faith in the senior management of Royal Mail and the service has been deliberately run down.'

It is set to meet with EP Group next week to call for what it calls a 'complete reset in employee and industrial relations'. 

Mr Kretinsky is already a formidable force in British business. He owns stakes in West Ham FC, supermarket Sainsbury's and energy giant EPH, which has power plants across England.