The owner of Britain's struggling Royal Mail said Wednesday it had accepted a takeover proposal from Czech billionaire Daniel Kretinsky worth £3.6 billion.
It comes after Kretinsky's conglomerate EP Group formalised an improved offer for International Distribution Services.
"The IDS board believes that the offer from EP is fair and reasonable," IDS chairman Keith Williams said in a statement posted on the London Stock Exchange.
EP already has a stake of 27.6 per cent in IDS, while the takeover is subject to shareholder and regulatory approvals.
Former state monopoly Royal Mail was privatised in 2013 and has since seen its core letters business ravaged as consumers increasingly communicate online, which has conversely helped its international parcels business, GLS.
Britain's communications regulator Ofcom has proposed that Royal Mail cut delivery to five days, or even three days per week, potentially saving the company hundreds of millions of pounds.
IDS has long called for a shakeup of the universal service obligation (USO), which stipulates that Royal Mail must deliver letters six days a week to all 32 million addresses in the UK for the price of a stamp.
European potential
EP on Wednesday described IDS as "a strong business with solid foundations and the potential to become one of the leading postal logistics groups in Europe", subject to modernisation that includes USO reform.
At the same time, Kretinsky said his group "has the utmost respect for Royal Mail's history and tradition", adding that owning a business with more than 500 years of history "will come with enormous responsibility - not just to the employees but to the citizens who rely on its services every day".
The accepted offer was priced at 370 pence per IDS share. Following Wednesday's announcement, IDS stock was up 2.9 per cent at 330.5 pence in early London trading.
"The group's international arm GLS has long been considered the jewel in the company's crown, enjoying a level of success which Royal Mail has found elusive and EP Group will have been eyeing up the long-term opportunities here," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.
EP said it would honour a commitment by IDS management not to impose compulsory redundancies at Royal Mail until April next year.
Dave Ward, general secretary of the Communication Workers Union, said he would meet with EP next week, when he will call for "further commitments on the future of the company".
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IDS employs about 153,000 staff, with the vast majority representing Royal Mail.
Labour welcomes move
Opposition Labour Party has said it will ensure that assurances given by Kretinsky concerning Royal Mail are adhered to if the party wins the July general election.
EP Group had included provisions concerning employee benefits, among other things, as part of the takeover.
"These assurances are welcome that Royal Mail will retain its British identity and safeguard its workforce with no compulsory redundancies. Labour in government will ensure these are adhered to," the party said in a statement. (Agencies)
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