Royal Mail owner agrees to £5.3bn takeover by 'Czech Sphinx' Daniel Kretinsky

The owners of Royal Mail have agreed to a multi-billion pound takeover bid by Czech billionaire Daniel Kretinsky.

The company's parent firm International Distribution Services (IDS) said its board of directors had approved the deal after a formal offer was made earlier this month.

It said the agreement included a series of "contractual commitments" to protect public service aspects of the Royal Mail - such as its universal service obligation to "one-price-goes-anywhere" first-class post six days a week.

The £3.6bn takeover deal values the company at £5.3bn, including debt.

Mr Kretinsky's EP Group already owns 27.6% of the business.

Shareholders will vote on the deal at IDS's next annual general meeting in September.

It is also expected that the takeover will come under heavy scrutiny from regulators before it can go ahead.

The billionaire, who has been nicknamed the "Czech Sphinx", reportedly due to his enigmatic nature and reluctance to speak in public, also owns parts of West Ham Football Club and Sainsbury's.

Read more: Many are mystified why a Czech billionaire wants to buy Royal Mail's owner

The offer would see EP Group buy IDS for 370p per share.

IDS said Royal Mail would keep the company's branding and UK headquarters under the deal.

The company also insisted that the employment rights of all staff would be protected and that there was "no intention to make any material changes to overall headcount or reductions in the number of front-line workers".

Unions and senior politicians have previously raised concerns about the potential takeover of the postal service, which was privatised in 2013.

The Labour Party previously called for a commitment for the Royal Mail to remain domiciled in the UK and keep paying tax here as part of any deal.

Reacting to the announcement on Wednesday, shadow business secretary Jonathan Reynolds said: "These assurances are welcome that Royal Mail will retain its British identity and safeguard its workforce with no compulsory redundancies.

"Labour in government will ensure these are adhered to."

Business Secretary Kemi Badenoch met IDS bosses earlier this month for talks on the takeover, and is said to have urged its representatives to ensure services were protected for the vulnerable, those in remote areas and small businesses.

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General secretary of the Communication Workers Union, Dave Ward, said: "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 reset in employee and industrial relations, the restoration of postal services and further commitments on the future of the company."

He added: "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".

Mr Kretinsky described the Royal Mail as "part of the fabric of UK society and has been for hundreds of years".

He added: "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."

It comes after the Royal Mail put forward proposed shake-up plans to Ofcom as part of turnaround efforts, including cutting down on some deliveries.

The regulator also recently launched an investigation after the company said it delivered less than three-quarters of first-class post on time in the last year.