IDS share price: Royal Mail owner’s shares close flat

Shares in International Distributions Services (IDS), the parent company of Royal Mail, saw a modest increase on Tuesday but ultimately closed flat as the deadline for a takeover bid by Daniel Křetínský's EP Group draws near.

IDS share price rose by nearly 2% during the day, adding to a significant rally of around 52% since mid-April, when Křetínský, often referred to as the ‘Czech Sphinx,’ first made his offer to acquire the company that owns the UK's national postal service.

IDS Shares Edge Up as Takeover Deadline Looms

At market close, IDS shares were up just 0.44%. A year ago, the stock traded at 199p, but today it sits around 326p, partly driven by the ongoing takeover bid.

Although IDS initially rejected Daniel Křetínský's offer, the company has indicated it is "minded" to accept a revised bid valued at approximately £3.5 billion. Křetínský’s EP Group, which already holds a 27.6% stake in IDS through its affiliate Vesa Equity, has raised concerns that a successful takeover could lead to job cuts, potentially affecting around 1,000 positions.

The clock is ticking, with EP Group facing a deadline tomorrow to submit a firm offer. IDS has stated that any potential deal will depend on the final terms presented. In its latest earnings report, the company warned that a change in control could cast "significant doubt" over its future viability.

The company is also dealing with substantial financial obligations, including a large debt load and an undrawn £925 million bank loan facility. If EP Group takes control, it may need to renegotiate this loan, with the possibility that the facility could be withdrawn.

Politicians Demand Guarantees as Foreign Takeover of Royal Mail Faces Scrutiny

Politicians have expressed concern over the potential foreign takeover of Royal Mail, a vital British institution. The Labour Party has pledged to "safeguard" the service, urging Daniel Křetínský to provide assurances that the business will remain UK-based and continue serving the public with its traditional values.

Business and Trade Secretary Kemi Badenoch has reportedly warned that any sale to a foreign entity must include certain guarantees to protect crucial services. Among these guarantees is the continuation of the current six-day-a-week delivery schedule, which remains a cornerstone of Royal Mail’s operations.

The potential takeover by Křetínský’s EP Group has sparked debate, with some lawmakers questioning whether a foreign buyer could prioritize profitability over service delivery, especially in rural and remote areas. As the deadline for a firm offer approaches, the government’s stance on protecting Royal Mail’s core services will be a key factor in determining the deal’s outcome.

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