International Distributions Services PLC (LSE:IDS)-owned Royal Mail could see letter delivery obligations slashed under a prospective takeover by Daniel Kretinsky’s EP Group.
According to The Sunday Times, the Czech billionaire would look to have requirements for second-class post reduced to just three days a week.
This is from six-days a week under Royal Mail’s universal service obligation, with Kretinsky said to be set on retaining the system for first-class post.
Such a move could reportedly save Royal Mail £300 million a year, according to the company’s own plan, which would also see job cuts.
This would have to be approved by regulator Ofcom, though, with the company having long campaigned for obligations to be cut after they were implemented when it was privatised in 2013.
Kretinsky saw his most recent £3.5 billion offer for Royal Mail viewed favourably by the company last week, after an initial bid was rejected last month.
Royal Mail’s board said it was inclined to recommend the 370p per share offer to shareholders, leaving Kretinsky, who owns stakes in West Ham and Sainsbury’s, until May 29 to formally table the bid.
However, Chancellor Jeremy Hunt subsequently said the offer would be subject to national security checks, with the government ultimately able to block the deal.
Were Kretinsky’s offer ultimately approved, Royal Mail would be taken into full foreign ownership for the first time in its 508-year history.