IDS Board: the offer from EP is fair and reasonable

International Distribution Services has reached an agreement for the takeover by Czech billionaire Daniel Křetínsky however the deal still need to be approved by IDS Shareholders on 25 September at their AGM.

Commenting on this announcement, Keith Williams, the Chair of IDS, 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.

The IDS Board wishes to thank our employees across Royal Mail and GLS for the progress which is being made in both companies to transform and adapt to a rapidly changing market in both the UK and Europe.

It is the IDS Board’s belief that EP will continue to enhance IDS’ investment in strategic areas such as network and out-of-home solutions.

The IDS Board believes that the offer from EP is fair and reasonable given that there are uncertainties ahead and allows investors to realise value at a significant premium.”

Commenting on this announcement, Daniel Křetínský, founder and chairman of EP, said:

“IDS, and Royal Mail in particular, form part of the national infrastructure of the countries they operate in. 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. We are committed investors in the UK and first became a shareholder in IDS four years ago, as we saw the potential for the business to become one of the largest postal logistics groups in Europe. But IDS’ market is evolving quickly, and it must accelerate its transformation and investments into modernisation to keep up with the competition. We will support the business in the next critical phase of its transformation and beyond, providing our experience and financial resilience to support the management team. We look forward to working closely with all of IDS’ stakeholders to deliver against its full potential.”

Responding to the latest developments on the Royal Mail takeover bid, CWU General Secretary Dave Ward said: “This situation is a direct result of a failed and ideological privatisation over a decade ago mixed with the blatant mismanagement of the company in recent years. These events have ripened one of the most iconic and important companies in the UK for a takeover by foreign investors. 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. We will meet with EP Group next week and call for a complete re-set in employee and industrial relations, the restoration of postal services and further commitments on the future of the company.

We will also be directly engaging with the Labour Party and other stakeholders to call for a new model of ownership for Royal Mail where our members and customers have a direct say in key decisions and the creation of a golden share which will protect a key part of the UK’s communications infrastructure.”