International Distributions Services plc (IDS), the parent company of Britain's historic postal service Royal Mail, has accepted a takeover offer from EP Corporate Group, owned by Czech billionaire Daniel Kretinsky.
The deal values the company at approximately £3.568 billion on a fully diluted basis, with an enterprise value of £5.284 billion, underscoring the significance of one of the nation's most iconic institutions.
In response to the announcement, shares of Royal Mail's parent company rose by 4.11 percent on the London Stock Exchange, trading at 334.40 pence.
The acquisition will be carried out by EP UK Bidco Limited, a newly established entity owned by EP Corporate Group and J&T Capital Partners. This transaction excludes the shares owned or controlled by VESA Equity Investment S.a r.l., of which EP Corporate is a full shareholder and which holds a 27.6% stake in IDS.
Under the terms of the agreement, IDS shareholders, which include interests in Royal Mail and delivery business GLS, will receive 370 pence per share. This breaks down to a cash consideration of 360 pence per share, a final dividend of 2 pence per share for fiscal 2024, and a special dividend of 8 pence per share.
However, the special dividend will only be paid if the acquisition becomes unconditional. The final dividend, pending approval, is set to be distributed on September 30 to IDS shareholders who are on the register as of August 23.
The purchase price offers a premium of approximately 72.7% compared to the closing price of 214 pence on April 16, 2024, the last business day before the offer period commenced.
Royal Mail, established by Henry VIII in 1516 as a postal service for the King and his Court, was later opened to the public by Charles I in 1635. In 2013, it became a publicly listed company as a subsidiary of IDS.
VESA, EP's private investment arm, has held a significant stake in the firm since 2020. Both VESA and EP regard IDS as a robust business with substantial potential despite facing significant challenges. They believe that IDS has the capability to evolve into a leading postal logistics group in Europe, with successful transformation, modernization, and investments in out-of-home solutions, ultimately returning to growth in both revenue and market opportunities.
Daniel Kretinsky, founder and chairman of EP, remarked, "IDS, and Royal Mail in particular, are integral parts of the national infrastructure in the countries they serve. Beyond that, Royal Mail is a vital part of UK society with a history spanning hundreds of years. The EP group respects Royal Mail's storied legacy and recognizes the significant responsibility that comes with ownership—not just to the employees, but to the citizens who depend on its services daily."
