The news broke late on Sunday, 15 December, with business secretary Jonathan Reynolds claiming the “legally binding” undertakings the government had agreed mean the takeover “will be a good deal for the UK, be a good deal for the people who work for Royal Mail and a good deal for customers”.
However, there are warnings from within the greeting card industry that these assurances seem “pretty weak” although there is support for how a “savvy operator” like Mr Křetínský could harness the public’s love and demand for the 508-year-old Royal Mail to grow it.
The takeover of Royal Mail’s parent company International Distribution Services is a £3.6bn payment plus debts, valuing the company at £5.3bn in total, and the move taking it into foreign ownership for the first time in its history is expected to be completed early next year once shareholders have been persuaded to sell their shares as the IDS board has already given its approval.
The government will retain a so-called “golden share” in the organisation which will require it to approve any major changes to Royal Mail’s ownership, HQ location and tax residency, which must stay in the UK for the next five years, during which time the Czech will not take any dividend payout unless the delivery service equals or exceeds the 2023/34 performance.
EP Group also has to maintain the one-price-goes-anywhere universal service obligation (USO) to deliver letters six days per week, Monday to Saturday, and parcels Monday to Friday to all UK addresses.
Daniel Křetínský said the talks with the government had “resulted in unprecedented commitments and undertakings”, and that EP Group had a “mission to make Royal Mail a successful modern postal operator with high quality service and products for its customers”.
An agreement in principle has also been reached with unions that includes workers receiving a 10% share of any dividends paid out to Mr Křetínský, as well as the formation of a workers’ group that will meet monthly with RM directors to give employees a bigger voice is how the company is run.
Dave Ward, general secretary of the Communication Workers’ Union, told the BBC it was an “extensive agreement” and the deal was the “best opportunity” to save the future of Royal Mail.
