In a bizarre twist of events Royal Mail – the centuries-old British postal service has been the focus of a multi-billion-pound takeover offer. Czech billionaire Daniel Kretinsky, often called the “Czech Sphinx” for his strange investment strategy offers to purchase International Distributions Services (IDS) which is an entity that is parent to Royal Mail, sparking both interest and debate across the UK.
Once a recognizable emblem of British communication and logistics, Royal Mail has been struggling with a dramatic drop in letters volumes, a rise in costs for labor and competition from the modern day delivery giants. In the wake of operational and labor losses as well as strikes being the subject of news in recent months Many analysts view Royal Mail to be a dying old-fashioned relic from the past. What makes a smart billionaire seek it out?
Kretinsky has a substantial stake in IDS the company, and his offer puts the company’s value at more than PS3 billion. According to market watchers that his interest might not lie in the declining postal system as such, but rather in its highly efficient logistics arm, GLS which is a lucrative European parcel system that is continuing to expand in the age of e-commerce.
In addition, despite Royal Mail’s difficulties, it has the largest delivery network in the country and legal obligations to provide the nationwide delivery of six days and a strong brand that is deeply rooted into British culture. These assets could be extremely beneficial under the right reforms and modernization of digital.
The proposed acquisition by a foreign company has been a source of controversy in Westminster as unions and politicians warning of the possibility of job losses and the loss of control over a crucial public service. It is reported that the UK government has announced that they will “closely scrutinize” any deal and has indicated that it could face regulatory issues.
The scenario paints an iconic picture of the 21st century one of a billionaire investor focusing on value while others are seeing decline, and a country split between keeping its traditions and adjusting to the global economy.
Whether the Kretinsky offer results in the successful acquisition or is rejected by political opposition one thing is certain that it will be a success. Royal Mail, even in its latter years, is an asset for the nation that draws attention and discussion.