Kretinsky Royal Mail takeover progresses – Will we see Rico back?

Category: Operations
Kretinsky Royal Mail takeover progresses - Will we see Rico back?

Royal Mail (or rather holding company IDS) have received an offer to buy the company from EP Group, run by Czech billionaire Daniel Kretinsky. The offer is roughly £3.5 billion or £3.60 per share which were trading at £214.20 representing a premium of 72.7%.

This is an improved offer compared to the £3.20 offer Daniel Kretinsky made in April and it’s worth noting that he already owns around 27% of Royal Mail.

The Royal Mail board seem inclined to recommend accepting Daniel Kretinsky’s offer, with the provisos that the Universal Service is protected along with workers. However they couldn’t resist a dig at the government saying that failure to agree to reform of the Universal Service has seriously impacted the company financially.

The Board is minded to recommend this offer price, which it considers to be fair and reflects the value of GLS’ current growth plans and 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.

It is however regrettable that despite four years of asking, the Government has not seen fit to engage in reform of the Universal Service and thus improve our financial position and ensure that Royal Mail could provide an economically sustainable service to the British public.

The Board believes that the proposed contractual undertakings to be offered by EP Group should ensure that IDS continues to deliver the key elements of the Universal Service in the UK and protect the interests of the workforce at both Royal Mail and GLS.

– Keith Williams, Chairman, IDS plc

Who’s in and who’s out?

A takeover would pose the immediate question of who is in and who is out. It’s likely that the entire board would be replaced – but what about senior Royal Mail executives? Probably many of them would also be edged out of the business. It really depends on who is appointed to run the operations.

It’s not beyond the realms of realistic possibility that Rico Back could be back if Daniel Kretinsky owns Royal Mail. He ran the highly profitable GLS for 18 years before becoming CEO of Royal Mail parcels from 2016 to 2018 and then CEO of Royal Mail Group from June 2018 to May 2020. If we see Rico back, then those he likes could stay and those that he didn’t like working with could go and that includes some big names of tenured Royal Mail execs who hitherto have survived multiple changes at the top table.

Rico is a parcels guy though, but he’ll still have the issue of letters and running the universal service, plus he doesn’t have a great track record of engagement with the CWU – the biggest postal workers union. But if he’s coming back what can we expect? Well it’s worth looking at his parting comment in 2020 when he left the role of CEO and it’s all about parcels, GLS, and international deliveries… Read into it what you will:

It has been a privilege to lead a Company that is so much a part of UK life at this crucial time in its history. I am proud of what I, together with our dedicated and loyal team, helped to build in Royal Mail and GLS. I look forward to seeing Royal Mail transform into a parcels-led, international delivery company, that continues to touch the lives of millions across the world.

– Rico Back, May 2020

3 Responses

    1. Exactly, as always with these things the senior management will get massive payoffs and the ordinary workers will more than likely end up worse off. That’s life in Britain today whether it will be under a new Labour Government or the Tories.

  1. Aus meiner Sicht hatte Rico Back als Gruppen-CEO einen vielversprechenden Wachstumsplan für die Royal Mail entwickelt und ich glaube es war keine gute Idee damals, ihn gehen zu lassen. Sein Erfolg, Arbeitspensum und Branchenwissen sind unbestreitbar. Ich denke, es wäre gut für die RMG, wenn er zurückkommt.

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