EP Corporate Group AS on Wednesday said International Distributions Services PLC, the owner of Royal Mail, had rejected a bid proposal.

Shares in IDS jumped 15% to 247.00 pence each in London on Wednesday, giving it a market value of around £2.39 billion.

EP Corporate, is a 100% direct shareholder of VESA Equity which holds an around 27.6% stake in IDS.

It is controlled by Czech billionaire Daniel Kretinsky, a lawyer-turned-energy tycoon known as the ‘Czech Sphinx’.

His other investments include stakes in UK supermarket chain J Sainsbury PLC, French newspaper Le Monde and London football club West Ham United.

EP Corporate said it had submitted a non-binding indicative proposal to IDS seeking its recommendation for a possible cash offer for the shares it does not already own.

Although this was rejected, EP Corporate said it looked forward to continuing to engage constructively with IDS and would consider ‘all options.’

EP Group said it viewed the UK as an attractive and dynamic market for investment.

It recognises that Royal Mail is in a ‘challenging situation.’

‘Weak financial performance, poor service delivery and a slow transformation, in the face of a market going through structural change, have put the business under unsustainable pressure. With the increasing competition from multinational companies in the UK postal market, private investment in Royal Mail becomes crucial,’ it added.

EP Group described Royal Mail as an important ‘national asset’ that would benefit from being able to take a longer-term view. It pledged to support ‘this iconic business’ as it transforms and rebuilds into a modern postal operator.

EP Group was responding to press reports regarding a possible bid.

IDS comprises two businesses, including international parcels network General Logistics Systems BV, based in Amsterdam, and the Royal Mail business in the UK.

Its postal business remains regulated. In March, Royal Mail proposed a change to its UK letter delivery offering, as it grapples with weaker volumes, in a move which could see ‘fewer than 1,000 voluntary redundancies’.

The measures could trim the net cost of the UK postal universal service operation by £300 million per year.

‘This is very dependent on how quickly reform is enacted and the rate of letter decline. These savings would allow Royal Mail to continue to invest in the modernisation and transformation of the business to provide products and services that customers want and reduce its environmental impact,’ IDS said.

IDS Chief Executive Officer Martin Seidenberg said: ‘If we want to save the Universal Service, we have to change the universal service. Reform gives us a fighting chance and will help us on the path to sustainability.’

EP Group has until May 15 to make a bid or walk way under UK takeover rules.

Copyright 2024 Alliance News Ltd. All Rights Reserved.