A UK broker expects the bid for Royal Mail owner International Distributions Services PLC (LSE:IDS) to go ahead even though the timetable was suspended on Friday after the Cabinet Office launched a National Security investigation.
Blocking the transaction would be difficult, says Peel Hunt, especially as the bidder, Czech billionaire Daniel Kretinsky, already owns power plants in the UK, which could pose a greater threat to national security.
No new points have been raised by the current government or unions that were not directly addressed in the 2.7 announcement, the note added.
Kretinsky, through his Vesa investment firm, has already received clearance under the NSI Act in 2022 to increase his stake to 27.5%.
Peel Hunt expects the Labour Government will seek to increase the level of protection offered and minimise the risk of any potential issues that could cause embarrassment until after the next general election.
The suspension will allow for antitrust and regulatory approvals, or at least non-objections, to be received from various countries, including the UK. Acceptances can still be received while the timetable is suspended.
“We continue to expect that further approval under the NSI Act will be given for the bid and that 370p in cash is an attractive offer for shareholders,” concluded the broker.
Shares in IDS dropped 0.5% to 343p on Monday.
- amended for source-