Royal Mail-owner rebuffs takeover approach

Kretinsky already owns 27% of IDS through his investment vehicle Vesa Equity Investment. Following reports by Reuters and the Financial Times that he was considering a bid, EP Corporate Group – Vesa’s parent company – confirmed that a non-binding indicative proposal had been made earlier this month.

EP said IDS had rejected the proposed cash offer, but added that it “looks forward to continuing to engage constructively with the board as EP Group considers all its options”.

As at 1230 BST shares in IDS had put on 18% at 252.72p. IDS, which owns both Royal Mail and Dutch parcels business GLS, has yet to comment.

Royal Mail was privatised between 2013 and 2015, but has struggled as it looks to maintain its expensive delivery network despite the number of letters being sent falling sharply.

The Royal Mail delivered 14.3bn letters in 2011 but expects to deliver just 7bn this year.

However, under its universal service obligation, the regulated postal business is bound to deliver items anywhere in the UK for the same price, Monday through Saturday.

The Royal Mail has also been hit by stiff competition in its parcels delivery service, however, as well as widespread industrial action.

Kretinsky founded Vesa with business partner Patrik Tkac in 2018. Vesa also holds stakes in J Sainsbury and Foot Locker.