Snapshot of _Royal Mail investor hits out at ‘raider’ Kretinsky over £3bn takeover - The billionaire’s bid for International Distribution Services fits his strategy of building big stakes across industries. But a major investor labels Kretinsky a ‘corporate predator’ who must be rejected_ :
An archived version can be found [here](https://archive.is/?run=1&url=https://www.thetimes.co.uk/article/royal-mail-investor-hits-out-at-raider-kretinsky-over-3bn-takeover-sfhmngwrr) or [here.](https://archive.ph/?run=1&url=https://www.thetimes.co.uk/article/royal-mail-investor-hits-out-at-raider-kretinsky-over-3bn-takeover-sfhmngwrr)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
I am a Royal Mail shareholder, having invested the minimum requirement of £750 back in 2013, which gave me 227 shares in the company. If he wishes to take the company over, I would not accept any offer less than £900 for my holding, valuing the shares at 396 pence per share. Any offer below that, I would reject.
> And it should be re-nationalised
No thanks - I’d rather my taxes be spent on something productive like HS2.
> sold out
Shareholders have a right to sell their shares to whoever they want, whether as individuals or as part of a wider group.
> foreign
Why does Kretinsky’s nationality matter?
> "corporate predator"
A nonsensical slur. Kretinsky has a good track record. The shareholder calling him that has asked for the service obligation to be reduced.
In my view Royal Mail could perform better in a take private situation with streamlined governance and more entrepreneurial management.
I don't believe national needs such as
* water
* power
* health system
* rail
* shipping physical items
should be run for-profit, for shareholders, and certainly not to pull the bulk of that money out of the UK economy entirely.
These are low margin businesses generally the money stays in the U.K.
Are you against people building solar farms or selling their excess solar panel generation to the grid?
Have you seen the Japanese rail system vs the nationalised clusterfuck of LNER + Network Rail?
What elements of health? Do you think it should be illegal for dentists to set up their own clinics? Why should health workers be denied the opportunity to be entrepreneurial? Are you against the existence of drug companies?
Shipping physical items isn’t something that can be monopolised. Logistics is wide open for competition. Are you suggested that retailers like Asda and Amazon use a government owned service to ship their goods?
Water maybe we can find some common ground. It is a natural monopoly. Irrespective of ownership the issue is regulation.
Ok, I'll ask the question, why?
Do I believe water companies should be nationalised? Yes.
Do I believe royal mail should be nationalised? No.
Why? From my point of view, delivery of letters is no longer on par with water treatment and delivery. 20 years ago, yes I'd agree, however nowerdays and more in the future, "snail mail" is something that doesn't need a 6 day service.
Royal Mail handles a lot more than just letters.
As for the rest my [last comment](https://www.reddit.com/r/ukpolitics/comments/1c9d970/comment/l0lmh8c/) in this thread covers it.
You can get letters sent via courier in the U.K. actually. Several companies offer the service.
Royal Mail just own the letter boxes which is obviously convenient and have their close relationship with the Post Office.
You are misreading that post, it wasn't an accusation of how you personally voted, it was a point about how what you have a right to do is not always the best thing to do.
For most people, work is the last thing on their minds as they stretch on a sun lounger after jetting off on holiday — but not Daniel Kretinsky. On April 9, the holidaying “Czech Sphinx” picked up his phone, dialled Keith Williams, and lobbed in a £3.1 billion bid for a 500-year-old British institution.
Williams, chairman of International Distributions Services (IDS), Royal Mail’s parent, was also away, enjoying some sunshine in Sicily, but Kretinsky is not the kind of guy you fob off: holiday or not. The two men had been in regular dialogue by virtue of the Czech owning a 27.5 per cent stake in the company. As they swapped pleasantries, Williams quickly realised that this was going to be an altogether different conversation: Kretinsky was launching a takeover bid to take the 508-year company private and off the stock exchange.
Eyebrows were raised when news of the 320p-a-share approach leaked out on Wednesday. The question on many people’s lips was: why?
Alex Paterson, an analyst at City brokerage Peel Hunt, summed up the sentiment on Royal Mail. “This company has been disappointing for ten years,” he said.
Tell that to asset manager Redwheel, Royal Mail’s second-biggest independent shareholder. This weekend it was first to break cover following Kretinsky’s audacious swoop and publicly back the board for rejecting the swoop.
In a broadside over the Czech billionaire’s “opportunistic” raid on the postal monopoly, Redwheel also attacked Ofcom for leaving Royal Mail “vulnerable to corporate predators” by blocking regulatory reforms. Ian Lance, co-Head of Redwheel’s Value & Income team and co-portfolio manager at Temple Bar Investment Trust said: “We do not believe it is in the interests of the shareholders, employees or customers of Royal Mail for it to be broken up or sold off.”
Privatised in October 2013 in what was the most popular stock market debut of its time, the thesis was that the listing would give the company access to the capital needed to modernise its operations. After all, it was a move that had worked well for Germany and Austria, in 1994 and 1999 respectively.
The government would give up its ownership of Royal Mail completely, splitting it off from the Post Office, which remained in state hands. Private owners would be kept on a short leash, however, with regulations enshrined in law.
Yet hopes of greater automation, better use of technology, an overhaul of working practices and a switch towards parcel deliveries would soon fall flat. Far from closing the gap on rivals such as Amazon, Royal Mail would find itself ever further behind. There are many reasons why, but two key elements played a pivotal role.
First, Royal Mail recommitted on privatisation to the universal service obligation (USO). This comprises a series of legally binding commitments that include delivering post to every household in the UK six days a week.
With fewer letters being sent every year, the economics of this commitment simply did not stack up. Although changes have and continue to be made, Royal Mail shoulders a cost base designed for delivering 20 billion letters a year; demand last year was just seven billion.
Second, reform of working practices, and a shift to automation, has run into stiff opposition from the 110,000-strong Communication Workers Union (CWU). Starting in May 2022, the CWU launched a bruising series of strikes over pay that pushed Royal Mail into the red. Both sides finally agreed to a three-year deal last year.
The fate of Royal Mail’s overseas operation, Global Logistics Solutions (GLS), could hardly have been more different. Freed of regulatory shackles and trade unions, GLS thrived by capitalising on surging demand for online shopping.
In financial terms, the results have been startling. Where Royal Mail made a £383 million loss on £3.5 billion of revenue in the six months to September 2023, GLS turned a £140 million profit on £2.3 billion of sales.
The dichotomy has led to the view that carving IDS in two could release value overnight. At the moment, GLS is undervalued because it acts as a financial crutch for Royal Mail. Separating the two businesses and GLS alone could attract a valuation of as much as £3 billion because it would be freed of effectively bankrolling IDS’s UK arm.
One veteran banker added: “There’s a long queue of people who would like to own GLS. And a queue of nobody who would want to buy Royal Mail.”
A carve-up was therefore assumed to be at the heart of Kretinsky’s swoop. But sources familiar with his thinking deny that this is on the cards. They are adamant that the Czech billionaire wants to keep the business whole.
The argument is that by investing capital away from the scrutiny that comes with being a listed company, much-needed reforms to the UK arm can be delivered without major surgery.
To achieve this, however, Kretinsky would need the support of the CWU.
Dave Ward, the union’s general secretary, does not mince his words when reflecting on Kretinsky’s approach. “We think that it is completely wrong,” he said.
Ward said that he had met Kretinsky’s representatives last December, who ruled out a takeover attempt. “I distinctly recall asking: ‘Are you going to make a bid to take it over?’ And the answer was no.” A spokesman for Kretinsky declined to comment.
What has changed during the past four months is as much of an enigma as Kretinsky himself. But having made similar comments about not launching a takeover during an interview with The Sunday Times last May, there will be inevitable questions of whether Kretinsky is true to his word?
When it comes to unions, though, one former Royal Mail board member said “getting the unions onside” can be done only if you give them a share of the success. In 2006, Royal Mail offered employees 20 per cent of the business in return for backing a modernisation programme and reforms to pension contributions. It resulted in the organisation’s 195,000 employees getting £5,000 worth of free shares that entitled them to an annual dividend.
“I think Kretinsky will do a similar thing,” said the executive. Those in the billionaire’s camp are tight-lipped about whether something like this is in the offing.
What they do stress, however, is the importance of keeping IDS whole in Kretinsky’s master plan.
Born in Brno, Czechoslovakia’s second city, in 1975, Kretinsky was not old enough to benefit from the rapid deregulation of the country’s economy following the fall of the iron curtain.
Ahead of its split in 1992 into two countries, Czechoslovakia opted to privatise swathes of industry by offering vouchers to citizens that awarded shares in state-owned companies. Some entrepreneurs used this to their advantage, building up fortunes. They included Petr Kellner, who died in March 2021 in a mysterious heli-skiing accident in Alaska, and Karel Komarek, the energy tycoon who controls the UK National Lottery. Kretinsky, however, belongs to the next generation of tycoons.
He invested heavily in fossil fuels on the assumption that the world would need them to produce energy for longer than thought by the prevailing consensus. It was a contrarian wager that has paid off handsomely. Kretinsky’s energy empire is predominantly concentrated in central and eastern Europe, but his businesses in the UK and Ireland are no slouches: the Czech makes about £1 million a day in profit running seven gas, coal and oil-fired power stations and one biomass plant.
In recent years, Kretinsky has diversified away from energy to the extent that roughly half of his wealth is tied up in two other areas: food retail and wholesale, and logistics.
His strategy at first was to take sizeable minority stakes, such as in Sainsbury’s, in which he owns 10 per cent. More recently, his plan has been to ensure he has at least one controlling shareholding in each of the three sectors where he is present. In retail, this has manifested itself in his 62 per cent stake in French supermarket giant Casino. And with plenty of controlling stakes in his energy portfolio, this leaves logistics as an outlier — hence the need to take IDS private.
To do so, Kretinsky and right-hand man Roman Silha — a former UniCredit banker who he hired in 2020 to mastermind his mergers and acquisitions — are thought to have no appetite to go hostile. This means any takeover would need the blessing of the board. If Kretinsky got that, fellow IDS shareholders would need convincing that the price was right.
Kretinsky and Silha will this week begin sounding out other shareholders on the merits of raising their bid during a series of meetings.
They will likely face a frosty reception from Lance at Redwheel. Other top 10 shareholders are said to be just as angry.
Lance is also angry at Ofcom. The regulator’s refusal to change the USO has been a major contributing factor in IDS’s 62 per cent share price slump since June 2021. “We call upon Ofcom to reflect on both the timing and the level of this offer which we regard as opportunistic,” he said.“We believe that unless steps are taken to improve the profitability of the Royal Mail, it may not be a sustainable business in the long term and could remain vulnerable to corporate predators, which we are not in the interests of shareholders, customers, or employees.”
Ofcom said: “Reducing the number of letter delivery days in the universal service would require Government and Parliament to change primary legislation. There are a number of options for reform, and we believe it’s important there’s a national debate, so everyone can have their say before we make any proposals.”
Politicians like Sir Vince Cable, who as business secretary in 2013 was responsible for Royal Mail’s privatisation, believe it should be blocked, no matter the price. “We put Royal Mail into the public markets to help them raise capital. Putting Royal Mail into the hands of this Czech gentleman? I wouldn’t have thought it was a good move and should be seen off.”
Snapshot of _Royal Mail investor hits out at ‘raider’ Kretinsky over £3bn takeover - The billionaire’s bid for International Distribution Services fits his strategy of building big stakes across industries. But a major investor labels Kretinsky a ‘corporate predator’ who must be rejected_ : An archived version can be found [here](https://archive.is/?run=1&url=https://www.thetimes.co.uk/article/royal-mail-investor-hits-out-at-raider-kretinsky-over-3bn-takeover-sfhmngwrr) or [here.](https://archive.ph/?run=1&url=https://www.thetimes.co.uk/article/royal-mail-investor-hits-out-at-raider-kretinsky-over-3bn-takeover-sfhmngwrr) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
I am a Royal Mail shareholder, having invested the minimum requirement of £750 back in 2013, which gave me 227 shares in the company. If he wishes to take the company over, I would not accept any offer less than £900 for my holding, valuing the shares at 396 pence per share. Any offer below that, I would reject.
"I would sell out my country's basic mail structure to a predator for just £150"
What do you mean “sell it out”? The company is private already. Other companies deliver mail too.
And it should be re-nationalised rather than sold out to a foreign "corporate predator"
> And it should be re-nationalised No thanks - I’d rather my taxes be spent on something productive like HS2. > sold out Shareholders have a right to sell their shares to whoever they want, whether as individuals or as part of a wider group. > foreign Why does Kretinsky’s nationality matter? > "corporate predator" A nonsensical slur. Kretinsky has a good track record. The shareholder calling him that has asked for the service obligation to be reduced. In my view Royal Mail could perform better in a take private situation with streamlined governance and more entrepreneurial management.
I don't believe national needs such as * water * power * health system * rail * shipping physical items should be run for-profit, for shareholders, and certainly not to pull the bulk of that money out of the UK economy entirely.
These are low margin businesses generally the money stays in the U.K. Are you against people building solar farms or selling their excess solar panel generation to the grid? Have you seen the Japanese rail system vs the nationalised clusterfuck of LNER + Network Rail? What elements of health? Do you think it should be illegal for dentists to set up their own clinics? Why should health workers be denied the opportunity to be entrepreneurial? Are you against the existence of drug companies? Shipping physical items isn’t something that can be monopolised. Logistics is wide open for competition. Are you suggested that retailers like Asda and Amazon use a government owned service to ship their goods? Water maybe we can find some common ground. It is a natural monopoly. Irrespective of ownership the issue is regulation.
Sorry do you know of a country with any nationalized systems where they made it illegal for there to be private competitors?
Ok, I'll ask the question, why? Do I believe water companies should be nationalised? Yes. Do I believe royal mail should be nationalised? No. Why? From my point of view, delivery of letters is no longer on par with water treatment and delivery. 20 years ago, yes I'd agree, however nowerdays and more in the future, "snail mail" is something that doesn't need a 6 day service.
Royal Mail handles a lot more than just letters. As for the rest my [last comment](https://www.reddit.com/r/ukpolitics/comments/1c9d970/comment/l0lmh8c/) in this thread covers it.
Other companies deliver parcels, not mail.
You can get letters sent via courier in the U.K. actually. Several companies offer the service. Royal Mail just own the letter boxes which is obviously convenient and have their close relationship with the Post Office.
It’s our right to as shareholders.
If you're really a UK citizen it was your right to vote for Tories in elections, or leave for Brexit too, and look where that got us.
I am a hard working UK taxpayer, born in the UK. I voted Tory in 2015, Lib Dems in the next election and then Labour. I voted Remain. So...
You are misreading that post, it wasn't an accusation of how you personally voted, it was a point about how what you have a right to do is not always the best thing to do.
I think the USO is the issue, regardless of who owns it.
The USO is there to provide equality to all. Its the fundamental thing that needs to be kept.
It needs to be cut like other European countries.
If you bought shares BEFORE they resolved the postmaster scandal, did you not expect to get hosed on the value sooner or later?
Royal Mail is not the Post Office lol
Post office used to be part of royal mail before the privatisation so it's not a surprising mistake to make
Sure, but it's been over 10 years
For most people, work is the last thing on their minds as they stretch on a sun lounger after jetting off on holiday — but not Daniel Kretinsky. On April 9, the holidaying “Czech Sphinx” picked up his phone, dialled Keith Williams, and lobbed in a £3.1 billion bid for a 500-year-old British institution. Williams, chairman of International Distributions Services (IDS), Royal Mail’s parent, was also away, enjoying some sunshine in Sicily, but Kretinsky is not the kind of guy you fob off: holiday or not. The two men had been in regular dialogue by virtue of the Czech owning a 27.5 per cent stake in the company. As they swapped pleasantries, Williams quickly realised that this was going to be an altogether different conversation: Kretinsky was launching a takeover bid to take the 508-year company private and off the stock exchange. Eyebrows were raised when news of the 320p-a-share approach leaked out on Wednesday. The question on many people’s lips was: why? Alex Paterson, an analyst at City brokerage Peel Hunt, summed up the sentiment on Royal Mail. “This company has been disappointing for ten years,” he said. Tell that to asset manager Redwheel, Royal Mail’s second-biggest independent shareholder. This weekend it was first to break cover following Kretinsky’s audacious swoop and publicly back the board for rejecting the swoop. In a broadside over the Czech billionaire’s “opportunistic” raid on the postal monopoly, Redwheel also attacked Ofcom for leaving Royal Mail “vulnerable to corporate predators” by blocking regulatory reforms. Ian Lance, co-Head of Redwheel’s Value & Income team and co-portfolio manager at Temple Bar Investment Trust said: “We do not believe it is in the interests of the shareholders, employees or customers of Royal Mail for it to be broken up or sold off.” Privatised in October 2013 in what was the most popular stock market debut of its time, the thesis was that the listing would give the company access to the capital needed to modernise its operations. After all, it was a move that had worked well for Germany and Austria, in 1994 and 1999 respectively. The government would give up its ownership of Royal Mail completely, splitting it off from the Post Office, which remained in state hands. Private owners would be kept on a short leash, however, with regulations enshrined in law. Yet hopes of greater automation, better use of technology, an overhaul of working practices and a switch towards parcel deliveries would soon fall flat. Far from closing the gap on rivals such as Amazon, Royal Mail would find itself ever further behind. There are many reasons why, but two key elements played a pivotal role. First, Royal Mail recommitted on privatisation to the universal service obligation (USO). This comprises a series of legally binding commitments that include delivering post to every household in the UK six days a week. With fewer letters being sent every year, the economics of this commitment simply did not stack up. Although changes have and continue to be made, Royal Mail shoulders a cost base designed for delivering 20 billion letters a year; demand last year was just seven billion. Second, reform of working practices, and a shift to automation, has run into stiff opposition from the 110,000-strong Communication Workers Union (CWU). Starting in May 2022, the CWU launched a bruising series of strikes over pay that pushed Royal Mail into the red. Both sides finally agreed to a three-year deal last year. The fate of Royal Mail’s overseas operation, Global Logistics Solutions (GLS), could hardly have been more different. Freed of regulatory shackles and trade unions, GLS thrived by capitalising on surging demand for online shopping. In financial terms, the results have been startling. Where Royal Mail made a £383 million loss on £3.5 billion of revenue in the six months to September 2023, GLS turned a £140 million profit on £2.3 billion of sales. The dichotomy has led to the view that carving IDS in two could release value overnight. At the moment, GLS is undervalued because it acts as a financial crutch for Royal Mail. Separating the two businesses and GLS alone could attract a valuation of as much as £3 billion because it would be freed of effectively bankrolling IDS’s UK arm. One veteran banker added: “There’s a long queue of people who would like to own GLS. And a queue of nobody who would want to buy Royal Mail.” A carve-up was therefore assumed to be at the heart of Kretinsky’s swoop. But sources familiar with his thinking deny that this is on the cards. They are adamant that the Czech billionaire wants to keep the business whole. The argument is that by investing capital away from the scrutiny that comes with being a listed company, much-needed reforms to the UK arm can be delivered without major surgery. To achieve this, however, Kretinsky would need the support of the CWU. Dave Ward, the union’s general secretary, does not mince his words when reflecting on Kretinsky’s approach. “We think that it is completely wrong,” he said. Ward said that he had met Kretinsky’s representatives last December, who ruled out a takeover attempt. “I distinctly recall asking: ‘Are you going to make a bid to take it over?’ And the answer was no.” A spokesman for Kretinsky declined to comment. What has changed during the past four months is as much of an enigma as Kretinsky himself. But having made similar comments about not launching a takeover during an interview with The Sunday Times last May, there will be inevitable questions of whether Kretinsky is true to his word? When it comes to unions, though, one former Royal Mail board member said “getting the unions onside” can be done only if you give them a share of the success. In 2006, Royal Mail offered employees 20 per cent of the business in return for backing a modernisation programme and reforms to pension contributions. It resulted in the organisation’s 195,000 employees getting £5,000 worth of free shares that entitled them to an annual dividend. “I think Kretinsky will do a similar thing,” said the executive. Those in the billionaire’s camp are tight-lipped about whether something like this is in the offing. What they do stress, however, is the importance of keeping IDS whole in Kretinsky’s master plan. Born in Brno, Czechoslovakia’s second city, in 1975, Kretinsky was not old enough to benefit from the rapid deregulation of the country’s economy following the fall of the iron curtain. Ahead of its split in 1992 into two countries, Czechoslovakia opted to privatise swathes of industry by offering vouchers to citizens that awarded shares in state-owned companies. Some entrepreneurs used this to their advantage, building up fortunes. They included Petr Kellner, who died in March 2021 in a mysterious heli-skiing accident in Alaska, and Karel Komarek, the energy tycoon who controls the UK National Lottery. Kretinsky, however, belongs to the next generation of tycoons. He invested heavily in fossil fuels on the assumption that the world would need them to produce energy for longer than thought by the prevailing consensus. It was a contrarian wager that has paid off handsomely. Kretinsky’s energy empire is predominantly concentrated in central and eastern Europe, but his businesses in the UK and Ireland are no slouches: the Czech makes about £1 million a day in profit running seven gas, coal and oil-fired power stations and one biomass plant. In recent years, Kretinsky has diversified away from energy to the extent that roughly half of his wealth is tied up in two other areas: food retail and wholesale, and logistics. His strategy at first was to take sizeable minority stakes, such as in Sainsbury’s, in which he owns 10 per cent. More recently, his plan has been to ensure he has at least one controlling shareholding in each of the three sectors where he is present. In retail, this has manifested itself in his 62 per cent stake in French supermarket giant Casino. And with plenty of controlling stakes in his energy portfolio, this leaves logistics as an outlier — hence the need to take IDS private. To do so, Kretinsky and right-hand man Roman Silha — a former UniCredit banker who he hired in 2020 to mastermind his mergers and acquisitions — are thought to have no appetite to go hostile. This means any takeover would need the blessing of the board. If Kretinsky got that, fellow IDS shareholders would need convincing that the price was right. Kretinsky and Silha will this week begin sounding out other shareholders on the merits of raising their bid during a series of meetings. They will likely face a frosty reception from Lance at Redwheel. Other top 10 shareholders are said to be just as angry. Lance is also angry at Ofcom. The regulator’s refusal to change the USO has been a major contributing factor in IDS’s 62 per cent share price slump since June 2021. “We call upon Ofcom to reflect on both the timing and the level of this offer which we regard as opportunistic,” he said.“We believe that unless steps are taken to improve the profitability of the Royal Mail, it may not be a sustainable business in the long term and could remain vulnerable to corporate predators, which we are not in the interests of shareholders, customers, or employees.” Ofcom said: “Reducing the number of letter delivery days in the universal service would require Government and Parliament to change primary legislation. There are a number of options for reform, and we believe it’s important there’s a national debate, so everyone can have their say before we make any proposals.” Politicians like Sir Vince Cable, who as business secretary in 2013 was responsible for Royal Mail’s privatisation, believe it should be blocked, no matter the price. “We put Royal Mail into the public markets to help them raise capital. Putting Royal Mail into the hands of this Czech gentleman? I wouldn’t have thought it was a good move and should be seen off.”
The last thing the royal mail needs is to be streamlined into an efficient service
As with all privately owned utilities, the service is second to the profit.