Royal Mail ready to accept £3.5bn takeover bid after workers & pensions are granted protection
ROYAL MAIL is ready to accept a sweetened £3.5billion takeover bid from Czech billionaire Daniel Kretinsky — after he pledged to protect workers and pensions.
His commitments are designed to soothe political jitters about a foreign takeover of a nationally important company.
A takeover could hand posties a £318million payday, as around 6 per cent of the company is owned by workers.
Royal Mail’s owner International Distribution Services yesterday revealed that just four hours before a takeover deadline it had received an improved cash offer at 370p-a-share from Mr Kretinsky’s EP GROUP.
Mr Kretinsky is already the biggest shareholder with a 27.5 per cent stake — alongside the sizeable stakes that he has in West Ham United and Sainsbury’s.
He is being advised by former Labour shadow business secretary Chuka Umunna, now a senior banker at JP Morgan.
The new bid is 16 per cent higher than his previous surprise offer of 320p-a-share, which valued the business at £3.1billion.
Royal Mail confirmed Mr Kretinsky had made several commitments to protect workers’ rights, including their pension pots and its £1.3billion surplus.
It is understood that he has also pledged not to separate it from its profitable parcels business GLS.
The company has already put forward a turnaround plan to Ofcom to reduce second-class deliveries to every other day — but keep a six-day service for first class post.
IDS revealed Mr Kretinsky said he would maintain this service level and keep the business headquartered and paying tax in the UK.
Keith Williams, chairman of IDS, said that it was “minded to recommend this offer price which it considers to be fair”.
Mr Williams added Kretinsky’s proposed undertakings would protect workforce interests and maintain key parts of postal standards.
It is understood IDS has talked to the Government about the approach.
Chancellor Jeremy Hunt had said last month that it was important to learn lessons from private ownership of water companies.
He said: “‘We need to make sure companies are regulated in a way that makes sure that what happens to the balance sheet doesn’t do damage to public services.”
BURBERRY TAX PLEA
THE boss of Burberry is lobbying for tax-free tourist shopping to return — after claiming that punters are shunning the UK to visit Europe instead.
Alongside reporting a slump in profits, Jonathan Akeroyd said: “The UK continues to significantly underperform continental Europe.
“Obviously, the absence of tax-free shopping is playing a part in that. London is losing out to Paris and Milan and the gap is widening”.
He said the firm’s stats show spending by Chinese tourists in London is less than half pre-pandemic levels, but in Paris it has tripled.
Burberry has suffered from a widespread slowdown in luxury spending which has knocked sales by 4 per cent to £2.9billion.
Profits plunged 40 per cent to £383million in the year to the end of March.
Mr Akeroyd said even the wealthiest shoppers were starting to cut spending.
It has been trying to sell more handbags, including its £1,450 “Rocking Horse” design, as well as new collections by designer Daniel Lee, who replaced Riccardo Tisci last year.
NATWEST SHARES DUTY BID
PLANS are being considered to lift stamp duty on Natwest shares to make its sale to ordinary Brits more attractive.
The Government next month will likely pull the trigger on selling a chunk of its remaining 26.9 per cent stake in the firm to individual investors.
It has had a stake since its £50billion bailout of Royal Bank of Scotland in 2008.
It is understood that the shares will be offered at a discount, with a free share on offer for long term investors.
But the Government is also considering lifting the usual 0.5 per cent tax on buying shares to encourage more Brits to take part when they become available.
A similar approach was taken in the stock market flotation of Royal Mail.
It comes a day after the boss of Flutter, the owners of Paddy Power, called for the move to “abolish stamp duty on share trading” to help revive the London Stock Exchange.
THE VICE IS RIGHT
SALES at the maker of Embassy cigarettes and Golden Virginia tobacco keep rolling in as price hikes make up for the number of people quitting.
Imperial Brands yesterday reported it had raised prices by 8.6 per cent, which it said more “than offset volume declines”.
The tobacco market size shrank by 15.2 per cent in the UK compared to last year but vape sales make up 7 per cent of revenues.
SHARES in soft drinks maker BRITVIC fizzed more than 10 per cent after beating sales forecasts and launching a £75million buyback.
The firm said all its brands, which includes Robinsons and J20, were enjoying success and growing.
LONDON’S NICE AS PI FOR TECH
RASPBERRY Pi has given a juicy boost to the City after confirming plans to list on the London stock exchange.
The company, which was valued at around £450million recently, makes small, cheap, credit card-sized computers that help to teach children how to code. Its decision to list is a big boost for the UK’s tech industry after founder, Eben Upton, had been leaning towards listing in New York.
Raspberry Pi’s cheapest computer costs £3.90 and it has sold 60million devices in 70 countries since 2012.
Last year it made £210million sales and operating profits of £29.7million.
Upton said the float would allow the firm to enable more “young people to realise their potential through the power of computing”.
The firm is owned by a charity foundation which has received $50million in dividends to promote computer.
ELECTRIC TARGETS HIT SKIDS
ELECTRIC car sales have stalled and the industry will struggle to hit targets, the boss of one of Britain’s biggest car dealers warned.
The government’s net-zero targets mean motor manufacturers must ensure 22 per cent of their cars sold this year are electric, rising to 28 per cent next year, or be hit with financial penalties.
Robert Forrester, chief executive of Vertu, said: “Battery electric vehicle sales growth in the UK has stalled. Government targets increase over the coming years and there’s a risk the industry falls short of these.”
Forrester said the threat of fines could mean manufacturers hold back sales of petrol and diesel cars to hit quotas, leading to higher prices for consumers.