Royal Mail is considering accepting a £3.5 billion offer from Czech billionaire Daniel Kretinsky, a month after his first bid was rejected.
International Distributions Services PLC (LSE:IDS) (IDS), the parent company of Royal Mail, revealed it had received a cash offer from the West Ham owner’s EP Group to purchase the company at 370p per share.
It represents a 16% premium to the 320p per share offer previously made by the ‘Czech Sphinx’.
Royal Mail’s board said it is inclined to recommend the offer to shareholders, with Kretinsky having until May 29 to issue a firm bid or walk away.
Keith Williams, the chairman of IDS, said: “The Board is minded to recommend this offer price, which it considers to be fair and reflects… the progress being made on change at Royal Mail to adapt the business to a significant fall in the demand for letters and growth in parcels.”
Both sides are expected to continue discussions regarding details of the deal and conduct their due diligence.
Kretinsiky, who’s EP Group already owns 27.5% of IDS, already pledged to the UK government that he will avoid cutting jobs should his takeover be successful.
Other promises include keeping a six-day delivery service for first-class post, protecting the Royal Mail brand and keeping the postal services headquarters in the UK.
IDS have surged more than 18% to over 320p per share following the announcement.
Unions have warned that if the deal were to go through it could threaten the "future of postal services in the UK".
Dave Ward, general secretary of the Communication Workers Union (CWU) said EP Group will need to be transparent with its union members and will need to ensure that it will not break up the company or raid its pension surplus.
"It cannot be right that a key part of national infrastructure is allowed to be owned by individuals or companies who have no vision for the future and no clear plan to put the workforce at the heart of turning Royal Mail around," he added.