A Royal Mail investor has spoken out to oppose 'Czech sphinx' Daniel Kretinsky's £3.6billion take over of the postal firm.
Jeremy Smith,a top-ten shareholder in International Distributions Services — the parent company of Royal Mail — has today said that current management can add more value to the struggling company.
It comes after the board of International Distributions Services said it had agreed to an offer of £3.57 billion from Czech billionaire Daniel Kretinsky's EP Group.
But Columbia Threadneedle Investments believes that Kretinsky's current offer of 370p-a-share undervalues the postal company.
The Times newspaper has 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.
Businessman Mr Kretinsky,48,already owned more than a quarter of IDS,which controls Royal Mail,Parcelforce and international mailing service GLS.
According to The Times,shares in the Royal Mail hit a two-year high after the board recommended the takeover by Mr Kretinsky (stock image)
'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.
New York TimesRoyal Mail
© OfficialAffairs
